- Crypto airdrops face declining trust due to insider manipulation and bot exploitation.
- Transparency, fair distribution, and anti-Sybil measures are key to restoring airdrop credibility.
Crypto airdrops have long been seen as a powerful tool for driving adoption and rewarding users.
However, Binance’s latest report sheds light on growing concerns, revealing how diminishing rewards, insider manipulation, and bot exploitation are curbing community trust.
Once a catalyst for ecosystem growth, airdrops now face scrutiny as their effectiveness comes into question.
Crypto airdrop winners and losers
As per the report, Pudgy Penguins emerged as a clear winner, earning a perfect 10/10 score for its well-executed distribution that prioritized NFT holders, reinforcing community trust.
Hyperliquid followed closely with a 9/10, setting a new standard in DeFi rewards with its highly anticipated HYPE airdrop.
Source: Binance Research
However, not all projects fared well.
Redstone’s last-minute decision to slash community allocation from 9.5% to 5% sparked backlash, leading to a disappointing 2/10 rating from Binance.
The abrupt change fueled criticism, with many accusing the team of poor planning and eroding confidence in the project.
As expected, Binance’s report also sheds light on airdrops that failed to meet community expectations, further highlighting industry challenges.
Scroll’s October 2024 airdrop received a low 3/10 rating due to unclear eligibility criteria, leading to uneven reward distribution.
Likewise, Kaito’s February 2025 airdrop sparked controversy as insiders claimed 43.3% of the supply, leaving only 10% for the community—prompting influencers to quickly offload their holdings and erode trust.
Adding to these concerns, Sybil farming remains a persistent issue, with bots accumulating tokens unfairly.
Source: Binance Research
Technical mishaps, such as Magic Eden’s flawed claim process in December 2024, have only deepened frustration among users.
Can this be reversed?
However, besides exposing major flaws in crypto airdrops, the report also provides a roadmap to restore credibility.
As expected, last-minute allocation changes, unclear eligibility criteria, and insider favoritism have eroded trust, making transparency more essential than ever.
To fix these issues, Binance urges projects to establish pre-defined eligibility rules for retroactive airdrops and adopt fixed point-to-token conversion models for fairness.
The report suggests that the projects must also foster genuine community engagement, treating tokens as long-term incentives rather than mere giveaways.
On-chain monitoring and proof-of-humanity mechanisms, like those used by LayerZero, can further help combat Sybil farming and prevent exploitation.
Ultimately, the report delivers a clear message—crypto airdrops can democratize wealth and strengthen blockchain ecosystems, but their success depends on integrity, transparency, and execution.
