Bessie Liu

Arbitrum Foundation, the governing body behind Ethereum layer-2 scaling solution Arbitrum, is making decentralization strides.&nbsp;



The latest indicator: plans for a token airdrop alongside launching Arbitrum Orbit, its layer-3 development tool.



The move falls in line with a <a href="https://ethereum-magicians.org/t/proposed-milestones-for-rollups-taking-off-training-wheels/11571" target="_blank" rel="noreferrer noopener">proposal</a> from Vitalik Buterin, Ethereum’s co-founder, in which he identified necessary steps to allow optimistic rollups to “take off training wheels” — and become fully decentralized in the process.&nbsp;



Steven Goldfeder, CEO at Offchain Labs, told Blockworks that Arbitrum would be one of the first Ethereum rollups to move from stage zero to one.



“This is a very big milestone, not only for us at off-chain or the Arbitrum Foundation, but also for Ethereum scaling,” Goldfeder said.&nbsp;



<h2>How Arbitrum mapped out its upcoming airdrop</h2>



Arbitrum is positioning its airdrop — expected March 23 — as a way to place governance power into community hands, Goldfeder told Blockworks.



“We worked very closely with Nansen over the past few months on designing airdrop eligibility criteria,” Goldfeder said. “We have a point system based on different criteria, such as usage, to help determine the amount of points each user gets.”



The eligibility criteria for the airdrop can be found on gov.arbitrum.foundation.



The user airdrop will make up 11.5% of the total token supply, with an additional 1.1% earmarked for DAOs.



“So, projects on Arbitrum that have their own communities will also be eligible for the DAO to get an airdrop,” Goldfeder said. “Our hope and expectation are that this ends up in the hands of Arbitrum users as well, but it is the DAO who will have the ability to distribute them.”



The remaining governance tokens will be distributed over time to the community through grant programs and other initiatives led by the DAO.&nbsp;



“We’d like things to have an open and fair process, and I think history has shown us the importance of delegation in the claiming flow,” he said.&nbsp;



<h2>Layer 3 developer tools to boot</h2>



Alongside the airdrop announcement, Arbitrum has also released a development kit for those interested in building a layer-3 solution on top of Arbitrum.



The L3 development toolkit, dubbed Arbitrum Orbit, will allow anyone to launch their own L3 on top of the Arbitrum code base.



“The community will have the ability to innovate and build and also modify the code,” Goldfeder said. “The idea is giving the licensing over into the hands of the community.”



In one prominent feature, the ARB token will not be used to pay any fees on the Arbitrum chain, and on-chain fees will remain payable through ETH.



The mechanism is similar to Optimism’s OP token, which operates only as a governance token. Arbitrum’s airdrop has been much <a href="https://twitter.com/milesdeutscher/status/1584518035142217730" target="_blank" rel="noreferrer noopener">anticipated</a> since its competitor Optimism revealed its governance token last May.



“What the Arbitrum Orbit does, it will bring yet another tool into the hands of developers,” Goldfeder said. “You can now build a smart contract with the public Arbitrum chains and get security derived from Ethereum.”



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Arbitrum’s ARB Token Airdrop: It’s Happening

Magna, a token distribution infrastructure platform, is releasing an open-sourced airdrop tool that can handle up to 9,000 transactions simultaneously.



The head of product at Magna, Nitesh Gupta, told Blockworks that the new airdrop tool was similar to the Disperse app which launched in 2018.



“Since it was launched, nobody has created anything better,” Gupta said.



After noticing that there was an opportunity in the token distribution market, the team at Magna wanted to build a more efficient airdrop tool.



The latest product, with a <a href="https://www.urbandictionary.com/define.php?term=wen%20moon" target="_blank" rel="noreferrer noopener">meme-inspired</a> name, wentokens.xyz, is part of Magna’s vision to improve performance in low-level optimizations. The tool is said to be “30% cheaper and can handle more transactions” than its rival.



“The approach I took is quite similar to Disperse’s relatively standard airdrop,” said Harrison Leggio, protocol engineering lead at Magna. “Where we differ is that I utilize inline assembly to skip…unnecessary EVM opcodes that plain solidity code would be subject to.”



<h2>Low-level optimizations explained</h2>



A low-level optimization is simply a lower-level programming language — meaning that the written code is closer to the machine.



Similar to how hedge funds regularly use software engineered in the C programming language instead of Python, a growing number of cryptocurrency projects are choosing to use languages such as <a href="https://medium.com/@jtriley15/huff-vs-yul-for-evm-smart-contracts-620d1d618197" target="_blank" rel="noreferrer noopener">yul or huff</a> — which are more closely mapped to the bytecode on the Ethereum virtual machine (EVM), Gupta said.



“When people write at a lower level, it can be more optimal,” Gupta said. “I would say that lower-level languages tend to be harder to write and harder to read and reason — but they&#8217;re actually simpler and there&#8217;s less things going on.”



Patrick Collins, the founder of Cyfrin, a security auditing firm, has previously noted that he hopes that more cryptocurrency projects will eventually begin writing in lower-level languages as it will help significantly reduce gas prices.&nbsp;



“I wouldn’t be surprised to see popular projects re-written in lower-level languages in the future,” Collins said.



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Token Distribution Tool Aims To Make Airdrops More Efficient

Sebastian Sinclair

Tuesday witnessed the final airdrop and launch of BLUR, the native crypto of the upstart NFT marketplace of the same name, which saw one trader clinching close to $2 million.



Some NFT traders who <a href="https://blockworks.co/news/blur-last-airdrop-nfts" target="_blank" rel="noreferrer noopener">scooped the BLUR</a> airdrop sold as the asset’s price began in free-fall. BLUR was last trading around $0.76, down nearly 90% from prices beyond $6 briefly seen on some exchanges.



The token is listed on Coinbase and OKX, among other centralized platforms, as well as decentralized exchanges Uniswap.



Over time, airdrops have pivoted from paying new users for completing social tasks to rewarding early adopters. 



Blur, for example, scaled its crypto airdrops to NFT trading activity on its platform, which <a href="https://blockworks.co/news/blur-could-unseat-nft-marketplace-opensea" target="_blank" rel="noreferrer noopener">serves as both a NFT marketplace and aggregator</a>.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/12754703/embed#?secret=fKDn1UEM9T" data-secret="fKDn1UEM9T" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div></figure>



As Blockworks <a href="https://blockworks.co/news/blur-opensea-nft-volume-traders-airdrop" target="_blank" rel="noreferrer noopener">previously reported</a>, Blur&#8217;s incentives often inspired more trade volumes on the platform than market leader OpenSea over the past few months.



BLUR’s short-term volatility is to be expected. But the longer-term performance of other airdropped tokens may shed light on its potential future.&nbsp;



Blockworks analyzed the performance of 11 tokens issued via airdrops and found they&#8217;ve fallen 43.4% on average. 



UNI is a notable outlier alongside optimism (OP), the governance token used to help steward the Layer-2 Ethereum network of the same name. OP is up 74% since its first trading price recorded on CoinGecko, jumping from $1.40 on May 31, 2022 to $2.43 today.



Popular decentralized exchange Uniswap’s <a href="https://blockworks.co/price/uni" target="_blank" rel="noreferrer noopener">UNI</a> airdropped on Sept. 17, 2020. Two days later, it had risen 160%, from $2.97 to $7.82, per CoinGecko.



UNI had shed significant value after 40 days, eventually bottoming out at $1.70 before running up alongside the broader crypto market throughout 2021, to a peak of $45 on May 3. 



UNI is basically even over the past 30 days and down 36% on a yearly basis. It&#8217;s performed well since launch, comparatively, practically tracking bitcoin to more than double.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/12756024/embed#?secret=HDmzCZyrNT" data-secret="HDmzCZyrNT" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div></figure>



<h2>Blur rival LooksRare also airdropped crypto</h2>



<a href="https://blockworks.co/price/dydx" target="_blank" rel="noreferrer noopener">DYDX</a>, the token of its namesake decentralized crypto derivatives exchange, shot up 35% after its <a href="https://twitter.com/dydxfoundation/status/1435622063729938434" target="_blank" rel="noreferrer noopener">retroactive</a> airdrop on Sept. 8, 2021. DYDX jumped a further 70% over a three-week period to an all-time high of $26.80.



The token has since lost more than 95% of its value, dropping to a low of $1 last June. DYDX has enjoyed a 70% bounce over the last 30 days but it remains 60% down from prices one year ago.



Ethereum Name Service’s <a href="https://blockworks.co/price/ens" target="_blank" rel="noreferrer noopener">ENS</a> token, whose first price on CoinGecko was $39.31 on Nov. 10, 2021, spiked 107% to a high of $81.61 on Nov. 11, before halving to $39 only eight days later.&nbsp;



ENS is now trending down, sans a brief pump to $75. It has lost 14% on a yearly basis to reach $14.40, 63% below its first recorded price.



The native token of Blur rival LooksRare has fared much worse since its airdrop.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/12755118/embed#?secret=F09qJT2pXR" data-secret="F09qJT2pXR" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">uniswap and optimism stand as some of the best performing airdrop tokens</figcaption></figure>



After airdropping 120 million <a href="https://blockworks.co/price/looks" target="_blank" rel="noreferrer noopener">LOOKS</a> to certain OpenSea users on Jan. 10 last year, prices jumped 250% in the following nine days to an all-time high of $7.10. 



Price action failed to hold up throughout 2022 as the token shed 98% of its value — dropping to a low of $0.11 on Nov. 21. The token is down 89% over the past year.



Over the past few years, airdrops have proven successful in incentivizing user participation, particularly over the short term. But maintaining valuations seems difficult.



Smaller cryptocurrencies almost always correlate with bitcoin, so poor performances post-airdrop should be considered with this in mind. 



Still, their histories show they tend to suffer from intense volatility, especially in the days directly following their initial distributions.



David Canellis contributed reporting.



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What Previous Crypto Airdrops Tell Us About Where BLUR May Be Headed

<div id="highlights-block_6312249aee08f" class="highlights">
 <ul>
 <li>Although announcements have been made, the SUDO token has not yet been deployed</li>
 <li>The Ethereum-based token will initially be non-transferable until a governance vote determines otherwise</li>
 </ul>
 
</div>



Decentralized NFT marketplace <a href="https://cms.blockworks.co/?s=Sudoswap" target="_blank" rel="noreferrer noopener">Sudoswap</a> is laying the groundwork for a massive airdrop of 60 million SUDO tokens, an up-and-coming governance token built on the protocol.



At its core, Sudoswap allows users to use liquidity pools to buy and sell NFTs (non-fungible tokens) — similar to how <a href="https://cms.blockworks.co/tag/uniswap/" target="_blank" rel="noreferrer noopener">Uniswap</a> participants provide liquidity to pools and earn money from trading fees. The SUDO governance token will allow holders to participate in protocol governance and ensure the organization moves in the right direction.



The Ethereum-based token will initially be non-transferable, <a href="https://blog.sudoswap.xyz/sudo-distribution.html" target="_blank" rel="noreferrer noopener">a blog post</a> by Sudoswap said. This is to ensure that SUDO will not be circulated unless there is sufficient governance participation from SUDO holders.



“A governance proposal to initiate transferability may be put forward through the standard governance process for the sudoAMM protocol, which will be addressed at a later time,” the blog said.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">This post outlines the distribution of SUDO, the governance token of the sudoAMM protocol. <a href="https://t.co/aGwNWSDaB6">https://t.co/aGwNWSDaB6</a> NOTE THAT THE SUDO TOKEN GOVERNING THE SUDOSWAP PROTOCOL HAS NOT YET BEEN DEPLOYED. PLEASE EXERCISE CAUTION&mdash; sudoswap (@sudoswap) <a href="https://twitter.com/sudoswap/status/1565508305312571392?ref_src=twsrc%5Etfw">September 2, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The plurality of SUDO tokens (41.9%) will be available for distribution to XMON holders — a utility token behind NFT project 0xmons — a scarce digital collectible inspired by a mix of Pokemon, SCP and Lovecraft that lives on the Ethereum blockchain.



XMON holders will have a one-month window to decide if they want to receive SUDO. Those who wish to hold the governance token must lock away their XMON tokens for three months before withdrawal — a necessary step, as it will indicate their willingness to participate in sudoAMM governance.&nbsp;



“XMON will retain 100% of its functionality and will in no way be altered by the locking mechanism, except that the locked XMON will not be transferable during the locking period,” the blog post said. “The SUDO distributed is pro-rata to the amount of XMON locked, at a rate of 10,000 SUDO per 1 XMON locked.”



Of the remaining 58.1% of SUDO tokens, 15% will be given to the initial founding team of Sudoswap; another 15% will be distributed to SudoRandom Labs, a primary contributor to the sudoAMM protocol; and 25% will be given to the treasury governed by SUDO holders.



0xmons NFT holders and retroactive liquidity providers will each receive 1.5% of the initial SUDO supply.



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Sudoswap Is Getting a New Governance Token

Jacquelyn Melinek

<div id="highlights-block_6220e68e129d8" class="highlights">
 <ul>
 <li>Over $12.5 million in digital asset donations were sent to Ukraine’s crypto wallets on Wednesday after the country announced a pending airdrop</li>
 <li>“Instead, we will announce NFTs to support Ukrainian Armed Forces soon,” the country’s vice prime minister tweeted</li>
 </ul>
 
</div>



After what would have been a first-of-its-kind donor incentive, Ukraine has canceled an airdrop for contributors to its crowdfunding campaign.



The highest volume of donations for Ukraine occurred on Wednesday, with $12.5 million donated across over 35,000 Ethereum transactions, all after the announcement of an “airdrop” surfaced, according to Elliptic <a href="https://www.elliptic.co/blog/live-updates-millions-in-crypto-crowdfunded-for-the-ukrainian-military" target="_blank" rel="noreferrer noopener">data</a>.



The country initially shared that an airdrop was “<a href="https://twitter.com/Ukraine/status/1498911922791583746?s=20&amp;t=j4KQx4IIdj3rJgAGCxdHZA" target="_blank" rel="noreferrer noopener">confirmed</a>” for anyone who contributed to its crypto donations by 11 am ET on Thursday, Blockworks previously <a href="https://cms.blockworks.co/ukraine-government-prepares-first-of-its-kind-airdrop-to-crypto-donors/" target="_blank" rel="noreferrer noopener">reported</a>. Airdrops involve businesses or crypto projects providing free tokens or NFTs to their communities as a way to encourage adoption — in this case, to increase donations to the country. 



But, Ukrainian Vice Prime Minister Mykhailo Fedorov backpedaled early Thursday morning, about 29 hours after Ukraine made the initial announcement.



“After careful consideration we decided to cancel [the] airdrop,” Fedorov said in a <a href="https://twitter.com/FedorovMykhailo/status/1499348177002151937?s=20&amp;t=BJm7D5IaYQFXmcWewsFz5Q" target="_blank" rel="noreferrer noopener">tweet</a>. “Every day there are more and more people willing to help Ukraine to fight back the [aggression.] Instead, we will announce NFTs to support Ukrainian Armed Forces soon. We DO NOT HAVE any plans to issue any fungible tokens.”



Rumors arose in the crypto community that the Ukrainian government might have been planning to release Peaceful World, <a href="https://www.coindesk.com/business/2022/03/03/apparent-ukraine-world-airdrop-might-be-spoof/" target="_blank" rel="noreferrer noopener">WORLD</a>, tokens, in the airdrop for people who donated to its crypto crowdfunding campaign, according to <a href="https://www.coindesk.com/markets/2022/03/03/could-this-peaceful-world-token-be-ukraines-secret-airdrop/" target="_blank" rel="noreferrer noopener">reports</a> by CoinDesk.



Etherscan data shows that the tokens were sent to Ukraine’s crypto wallet address and although about 1 million WORLD tokens were <a href="https://etherscan.io/tx/0x70d66923bf5f08869c95472c0a5717ddc84927801bd65d4be4de7e841a7ffdaf" target="_blank" rel="noreferrer noopener">sent</a> to Uniswap, seemingly through Ukraine’s wallet, a third party potentially triggered the transaction without Ukraine’s involvement. 



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Peaceful World token rumored to be airdropped by the Ukrainian government are suspected to be fake and have been marked by Etherscan as a problem address, said this token is misleading to make people believe that it was sent from a well-known address, which is prone to fraud. <a href="https://t.co/e3mYWltRHW">pic.twitter.com/e3mYWltRHW</a>&mdash; Wu Blockchain (@WuBlockchain) <a href="https://twitter.com/WuBlockchain/status/1499325443530379268?ref_src=twsrc%5Etfw">March 3, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



There has been no confirmation by Ukrainian officials of any association with the token.&nbsp;



In total, over $46 million has been sent to Ukraine’s crypto wallet addresses across 96,000 cryptocurrency donations. Its total crypto donations rose 53% day-over-day from $30 million to $46 million, Elliptic <a target="_blank" href="https://www.elliptic.co/blog/live-updates-millions-in-crypto-crowdfunded-for-the-ukrainian-military" rel="noreferrer noopener">data</a> shows.



Other crypto-focused organizations have banded together to raise money as well — UkraineDAO has raised over $6.3 million, according to on-chain Etherscan <a href="https://etherscan.io/address/0x633b7218644b83d57d90e7299039ebab19698e9c" target="_blank" rel="noreferrer noopener">data</a>.



Ukrainian staking service firm Everstake also launched a Solana-based donation platform called Aid for Ukraine in collaboration with the country’s government and others in the crypto community. The platform has <a href="https://nation.io/dao/ukraine" target="_blank" rel="noreferrer noopener">raised</a> about $1.45 million, at the time of publication. 



Ukrainian government officials were not available for immediate comment on Thursday.



This is a developing story and may be updated if new information becomes available.



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Ukraine Cancels Proposed Airdrop After Receiving Record Donations

<div id="highlights-block_621fa25329d98" class="highlights">
 <ul>
 <li>The government has not provided additional information about what the Thursday airdrop will entail</li>
 <li>Since Ukraine launched its unconventional crowdfunding efforts on Feb. 26, it has accumulated over $30 million from about 50,000 donations</li>
 </ul>
 
</div>



Update: Ukraine has since <a href="https://cms.blockworks.co/ukraine-cancels-proposed-airdrop-after-receiving-record-donations/" target="_blank" rel="noreferrer noopener">called off the airdrop</a> for its crowdfunding campaign contributors. Ukrainian Vice Prime Minister Mykhailo Fedorov tweeted the cancellation just 29 hours after the country made the initial airdrop announcement.



<hr class="wp-block-separator"/>



The Ukrainian government has confirmed an airdrop for anyone who contributes to its crypto donations by 11 am ET on Thursday, March 3. The potential reward for the global community of donors foreshadows new potential use cases for crypto across mainstream audiences.



For context, airdrops involve businesses or crypto projects providing free tokens or NFTs to their communities as a way to encourage adoption — in this case, to increase donations to the country. The government has not provided additional information about what Thursday&#8217;s airdrop will entail.



“Ukraine making history tomorrow by being the first nation state to airdrop a token to those that donated,” Luke Martin, host of The Coinist Podcast, <a href="https://twitter.com/VentureCoinist/status/1499049620705525760?s=20&amp;t=bYbdqAyuA1aMzljQlhA6Ow" target="_blank" rel="noreferrer noopener">tweeted</a> on Wednesday.



<blockquote class="wp-block-quote">“Countries airdropping coins. Wild times.”</blockquote>



Ukraine launched its unconventional crowdfunding efforts on Feb. 26, just two days after Russia invaded the country. Since then, it has accumulated over $30 million from about 50,000 donations to its Ethereum, Polkadot and US dollar Tether wallets, as of Wednesday morning, according to <a href="https://www.elliptic.co/blog/live-updates-millions-in-crypto-crowdfunded-for-the-ukrainian-military" target="_blank" rel="noreferrer noopener">data</a> from Elliptic.



Additionally, the popular decentralized exchange Uniswap has created a “Donate to Ukraine” <a href="https://donate.uniswap.org/#/swap" target="_blank" rel="noreferrer noopener">feature</a> on its platform, which allows users to swap listed tokens into ether donations for Ukraine in a single Ethereum transaction. The exchange wasn’t available for immediate comment.



“The people of Ukraine are grateful to Uniswap,” Mykhailo Fedorov, vice prime minister of Ukraine and minister of digital transformation of Ukraine, said in a <a href="https://twitter.com/FedorovMykhailo/status/1498936977474965504?s=20&amp;t=KQCudLbW255ccianOlO9QA" target="_blank" rel="noreferrer noopener">tweet</a>.&nbsp;



Among those donations was a CryptoPunk NFT (non-fungible token) smoking a cigarette while wearing a blue hat and sunglasses. That NFT was worth about $200,000 and was sent to Ukraine’s Ethereum address.



Gavin Wood, who co-founded Ethereum and is the current founder of multichain protocol Polkadot and Kusama, also donated $5 million to the country, Ukraine <a href="https://twitter.com/Ukraine/status/1498733635083587584?s=20&amp;t=KQCudLbW255ccianOlO9QA" target="_blank" rel="noreferrer noopener">tweeted</a>.



&#8220;Bitcoin was created in a time of global adversity, the great financial crisis,” Matthew Le Merle, managing partner of Blockchain Coinvestors, said to Blockworks. “Right now, in Russia and Ukraine, the world is coming apart for tens of millions of people. Fortunately, Bitcoin is there for them and their families just when they need it.”



The crypto crowdfunding and airdrop point to a potential new way for mainstream adoption of the industry through traditional organizations such as government agencies.



&#8220;Airdropped tokens will forever serve as a public and immutable proof of something,&#8221; Haohan Xu, CEO of Apifiny, said to Blockworks. &#8220;Often these tokens will not only be receipts, but something of value.



In this case, the airdrop is not just a token of appreciation from Ukraine, but could also be valuable, Xu said.



&#8220;Donations are a simple point A to B transaction,” Xu noted. “As this situation develops in Eastern Europe, we will perhaps see blockchain-based [decentralized finance] apps do more good, such as facilitating financial access while centralized infrastructure is down.”



Funding the Ukrainian national defense through a global cryptocurrency crowdfund and airdrop is the modern day “war bond,” Nick Tomaino, general partner at 1confirmation, <a href="https://twitter.com/NTmoney/status/1498976681242947588?s=20&amp;t=Cx5qjKjeUuxJpv6mBan8qg" target="_blank" rel="noreferrer noopener">wrote</a>.&nbsp;



In the past, countries including the United States, Germany and Canada all used war bonds to raise money to fund participation in wars.



These bonds were typically limited to domestic involvement, so only Americans could buy Liberty Bonds, for example, Tomaino said. However, cryptocurrency-based crowdfunding and airdrops allow for anyone to participate globally.



“Cryptocurrency enables Ukraine to easily raise funds from anyone in the world who wants to support protecting their sovereignty — not just Ukrainians,” he said.



<blockquote class="wp-block-quote">“This has the potential to help deescalate the dangerous situation the world is currently [in.]”</blockquote>



While it is hard to determine the short-term impact from Ukraine’s crowdfunding and airdrop, the long-term impact can be very positive for blockchain adoption, Le Merle said.



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