‘Airdrops Have Been a Double-Edged Sword for Blockchain Gaming’

Steve Hassenpflug says successful airdrop strategies reward skill-based contributions, include vesting periods, and distribute assets with functional value. These approaches aim to foster long-term loyalty while avoiding inflation and exploitation.

Airdrops: Double-Edged Sword for Blockchain Gaming

Airdrops have become a staple in the blockchain industry, particularly within the burgeoning gaming sector. Initially hailed as a revolutionary tool for community building and decentralized governance, airdrops have also attracted controversy. Critics often slam them for fostering unsustainable economic models. This, they argue, has been particularly pronounced in the gaming world, where engagement and long-term player loyalty are paramount.

Steve Hassenpflug, game director at My Neighbor Alice, acknowledges both their potential and pitfalls. “Airdrops have been a double-edged sword for blockchain gaming,” he states. “On one hand, they’ve been effective for bootstrapping communities and distributing governance rights. On the other hand, they’ve often created unsustainable economic dynamics and attracted participants more interested in short-term gains than the game itself.”

The initial wave of gaming airdrops, Hassenpflug observes, followed a simplistic model, rewarding early adopters with tokens in the hope of translating this into sustained engagement. This approach, while generating initial buzz, frequently led to “airdrop farming,” where users engaged minimally with projects solely to qualify for rewards. Once received, these tokens were immediately sold allowing users to move to the airdrop.

However, Hassenpflug, a game designer, points to more successful airdrop strategies that share several key characteristics. These strategies, he argues, prioritize rewarding meaningful engagement over superficial interactions. They assign great importance to the implementation of vesting periods or utility requirements to discourage immediate selling.

The same strategies also prioritize the distribution of assets with functional value within the ecosystem, as well as targeting player segments aligned with the game’s long-term vision.

For blockchain gaming to mature, airdrops need to evolve in several ways,” Hassenpflug says. “First, they should be more closely tied to skill-based achievements or creative contributions within the game ecosystem. This ensures that tokens go to players who add value to the community.

Secondly, the distribution mechanisms should be resistant to exploitation. “Simple ‘interact X times to qualify’ models invite manipulative behavior,” Hassenpflug asserts. Thirdly, projects must prioritize sound tokenomics to prevent airdrop distributions from causing inflation and damaging long-term token value.

At My Neighbor Alice, Hassenpflug notes, the focus is on rewarding players who contribute meaningfully to the ecosystem through creation, community participation, and gameplay achievement, rather than simple participation metrics. He envisions airdrops as a tool for decentralizing ownership among genuine community members who will use their governance rights thoughtfully, rather than as a mere marketing ploy or liquidity generation mechanism.

Hassenpflug: NFT Market Correction Was Inevitable

Meanwhile, Hassenpflug argues that the ongoing evolution of airdrops—the shift from rewarding simple participation to favoring capital deployment and on-chain activity—has disadvantaged small users or retail users. This, in turn, is driving them toward yield farming strategies that offer consistent and predictable annual percentage yields (APYs), like those seen on Sonic and Berachain.

According to Hassenpflug, retail users are attracted to these strategies due to their transparency, lower barriers to entry, and accessibility to sophisticated decentralized finance (DeFi) tools. Explaining this shift, Hassenpflug stated:

“From a game theory perspective, it’s rational behavior. When the rules of airdrops shifted to favor whales, smaller participants naturally migrated to systems where they could still achieve meaningful outcomes with limited resources.”

Therefore, for blockchain gaming to flourish, it’s crucial to establish equitable economic models that value contributions from all players, not just those with significant capital. Exclusive systems that favor whales inherently threaten long-term stability, the game director argues.

Turning to non-fungible tokens (NFTs), which have been on the decline, Hassenpflug says this market correction was not only inevitable but is “actually beneficial for the industry’s long-term health.” He argues that the NFT market’s unsustainable highs seen in January 2022 were a result of speculative frenzy, rather than actual utility or artistic appreciation.

The market, he says, is now undergoing a crucial transition to sustainable valuation. He stated: “In gaming specifically, I believe NFTs have a promising future when they’re thoughtfully integrated to enhance player experiences rather than serve as mere investment vehicles.”

Hassenpflug insists the future of NFTs lies in their utility within digital experiences, not in high-priced digital images. He adds that as the technology matures, it will become seamlessly integrated, with the emphasis shifting from the NFT as a collectible to the functional value it delivers to users.