Proposal for retroactive airdrop to early adopters

There’s a lot of desire from the community for an airdrop. The team doesn’t sound opposed to this and they’ve tracked wallets using the protocol, but they want the DAO to determine any airdrop, so I think just asking for one (like in this thread Retroactive PSY token rewards for early users and community contributors) isn’t going to accomplish much. Instead I think the community needs to settle on a concrete proposal so I’ve drafted one and I’d like to hear feedback on it.

Snapshot period: 8/22/21 - 12/31/21

Total amount: 45M PSY (7.5% of the 600M DAO controlled tokens, 4.5% of the total 1B supply).

Distribution mechanism: The tokens get divided prorata according to the number of points each wallet has. Points are assigned according to the following criteria.

  • 1 point for each contract traded, up to a maximum of 50

  • A 2x multiplier for submitting a form to the team associating their discord handle (which joined the discord prior to 12/31/21) with their wallet.

  • An additional 2x multiplier if the discord handle posted at least 5 times prior to 12/31/21

- The 45M PSY number was constructed to be in the same ballpark of other successful airdrops. I looked at UNI, DYDX and RBN.
- The 50 contract maximum is designed to prevent whales and particularly MMs from getting too many tokens. Afaik Alameda is the only MM at the moment so they’re probably doing around ~50% of the volume, but I don’t think they should get a substantial amount of the airdrop given that they already have an allocation.
- The discord multiplier has two bonuses. First, combined with the 50 contract maximum it decreases the effectiveness of any sybil attacks. Second, it benefits the protocol by giving more tokens to active members who are more likely to contribute to governance in the future. Ribbon did something similar to reward active discord members and it was relatively successful (RBN Airdrop Distribution. To bootstrap Ribbon Governance, 3% of… | by Ribbon Finance | Medium).

- I did not research whether anyone tried to aggressively sybil attack for an airdrop. The cost of sybil attacking is low since anyone could have exploited my proposal by sending tons of limit orders and trading with themselves. It’s impossible to construct a perfect airdrop, but to make sure this isn’t widespread then someone who has access to the snapshot data could check a handful of wallets and see if a significant portion of them are dummy wallets. If a lot of airdrop winners are dummy accounts then I think further protection is needed. Potentially we could only reward points to those who give their discord/twitter handle, or only reward points for contracts that were held more than some period of time.
- I also assumed that MMs use a relatively small number of wallets but I didn’t confirm this. If they are creating a different wallet for each strike for example then we might want to change the criteria so that they don’t get too large of an allocation.
- Contracts are not the best measurement of volume, someone trading a 50 delta put is arguably doing a lot more ‘volume’ than someone buying a 1 delta put. That said, contracts are at least a simple measure and it’s one the team has tracked.
- Ideally the DAO could vote on a proposal like this and the team could implement it, but if they can’t they we need to allocate a bounty for community members to help.


I agree to use the number of traded contracts as a basis, not the traded volume, and set a cap on the traded contract volume. Although I don’t want it, I still recommend adding a distribution or linear release solution, which needs to be added to the entire economic model to ensure the stability of the currency price and ecology

1 Like

This airdrop plan is very detailed and sounds fair. I think it’s great.

you are right and you gave very clear airdrop distribution rules.thanks bro!i support you

well done!early users deserve rewards.

your proposal is great. your detail is brilliant. i hope psyoption team can think about this proposal seriously

Can we extend snapshot period to 01/05/22 due to option rollover actions? If there is an airdrop.

Hey @cloud I appreciate your proposal to the community. I am a core member of the team and wanted to jot my thoughts.

I worry that an airdrop blurs the lines of product market fit. We want to make sure that the community is engaging with the protocol because it is a great tool. Iterating the PSY offering is important to us as we continue to grow the PSY DAO. I also worry that airdropping 4.5% of the total is not the best use of PSY tokens right now! We have a number of new developments coming out soon to drive value back to the DAO.

Overall, this is the conversation we encourage and I hope that the community is able to determine what is best! Thanks for your input

Hi, I probably traded 200-300 contracts since October and generally I like the project. However, as a competing product has given me airdrops and rewards by using them, and I have become a meaningful bag holder of their token, it makes more sense for me to take my business there after the next expiry. It is stupid how this works, esp. given the other product is slightly inferior. Lastly, I’ve also seen the community dying in discord since the IEO has been announced.

1 Like