Ethereum Co-founder Vitalik Buterin Suggests Crypto Identity Solutions for Airdrop Challenges

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As a seasoned crypto investor with a fair share of battle scars from the volatile and often unpredictable world of digital assets, I find myself intrigued by Vitalik Buterin’s latest proposition for addressing the airdrop conundrum.

As an analyst, I’ve been closely observing the ongoing debate about airdrops, particularly within the Ethereum (ETH) community. Vitalik Buterin, one of its co-founders, has proposed leveraging cryptographic identity solutions to enhance privacy, given the recent controversies surrounding these airdrops. Airdrops are typically events that distribute enormous amounts of value to active users within an ecosystem. However, they also carry certain drawbacks.

Farmers Cheat Real Users of Project Airdrops

To bypass the system, many individuals involved in a token airdrop often use multiple accounts to “cultivate” or amass tokens before the official launch. This practice is common and often leads projects to tighten their distribution rules, with some using on-chain analysis tools to identify and eliminate these airdrop farmers.

This implementation had some downsides. The flushing-out phase negatively impacted genuine users, fueling debates around airdrop distributions. Regrettably, this unfavorable airdrop prediction might tarnish any project’s image. It’s no surprise then that the Hamster Kombat game, hosted on Telegram, decided to incorporate keys for its upcoming airdrop.

The Ethereum co-founder thinks his suggestion is a good solution to salvage the situation.

“Airdrops are a fascinating initial use case for ZK / blockchain-based identity/credential/attestation frameworks,” he noted on X, referring to zero-knowledge proof technology.

These solutions provide the capability to employ cryptographic proofs to enhance privacy. Ethereum’s co-founder emphasized that airdrops are primarily intended to motivate community members, rather than crypto farmers. They function as a method of recognizing and compensating community members for their efforts on the project, while simultaneously acting as a tactic to promote fairness among participants.

Buterin explained:

“The characteristics these identity/credential/attestation systems aim to establish are precisely what we’re discussing. Consequently, if you’re developing such systems, it’s quite logical to utilize token issuance as a trial case to hone and perfect your work in a challenging setting.”

Tokens Could Be Sold at Discounted Rates

The crypto pioneer mentioned that there are significant challenges with this method, expressing doubt that a single solution can overcome these obstacles.

He expressed his belief that the solution to this issue is complex and will need to develop gradually. It’s a challenging problem, but one that holds great potential because if we can crack it, the resulting solution could be applied broadly to recognize and compensate various forms of under-valued work in our economy worldwide.

The creator of Ethereum proposes that tokens should not always be distributed freely; instead, they might be offered at a reduced price during sales as an alternative to airdrops. In such scenarios, a project could assess a community member’s involvement to decide the discount percentage and the number of tokens they can purchase.

Besides these issues, there’s also an increasing number of false airdrops being distributed by scammers, posing as leading projects. Just last week, cryptocurrency data provider CoinGecko cautioned crypto users about such fake airdrops. They advised users to remain cautious and verify all details before clicking on anything.

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2024-08-28 16:52