Liquidswap LSD Token: First Airdrop

This article will cover details and methodology for the first airdrop of LSD to users of the Liquidswap protocol.

Allocation:

The first LSD airdrop will be 5% of the total token supply with 69% liquid at the token generation event (TGE) and the rest vested linearly over 4 months released monthly. Another 10% will be available over time in staking rewards and future airdrops. Tokens can be claimed at claim.liquidswap.com

The airdrop will be allocated accordingly to the following categories:

• 27% to community NFTs, meme tokens, product testers and ambassadors at snapshot date Jul 10, 2024
• 49% to early adopters: trading and liquidity added to Liquidswap before a snapshot date of Apr 7, 2024
• 24% to late users: trading and liquidity added to Liquidswap between the Apr 7, 2024 snapshot date and a Jul 10, 2024 snapshot date

Bonus for Identified Community Members:

A bonus multiplier is applied to the trading volume and liquidity count in the airdrop calculation for early and late users in order to reward key segments of the community more.
The following multipliers for trading volume and liquidity are applied to these categories:

• 10% to NFT and meme holders
• 20% to verified X followers of @Pontem and LumioFDN
• 10% to Lumio whitelisted addresses

As an example if you traded $100 and your total bonus multiplier is 10% + 20% then your trading volume for the April and July snapshots are counted as $130

Whales are excluded from bonuses to benefit smaller users (max cost = $500)

Methodology:

Proportion of Costs, Bot Mitigation, Wallet Maximums and distribution to middle class users.

Proportion of Costs:

An individual’s airdrop allocation used a proportion of costs associated with each category in order to determine a relative and reasonable proportion of cost for each account assuming a price for the token at launch.

The following costs were used for each category:

• Trading volume: a cost of 0.2% of trading volume - is an approximation of the average trading fee across uncorrelated and correlated assets. For example if a user traded $100 then cost is $0.20
• Time weighted liquidity added: a cost of 15% of capital allocated in one year. For example if a user allocated $100 of liquidity for 365 days then cost is $15
• Pirate NFT: 90 APT at $6.86 APT price
• Dark Ages NFT: 58 APT at $6.86 APT price  
• Doodoo NFT: 21 APT at $6.86 APT price
• Doodoo meme coin:  $0.54
• ReTURD meme coins: $6.33
• Product tester tier 1: $1000
• Product tester tier 2: $500
• Product tester tier 3: $250
• Ambassador tier 1: $200
• Ambassador tier 2: $500
• Ambassador tier 3: $1000

The following base proportions of costs were then used for each category:

Bot Mitigation:

A proportion of cost was used so that even if bots were included in the airdrop, they were rewarded proportionally to their costs. For example if a bot spent $100 in sum across accounts and a human spent $100 then they would have gotten the same amount of airdrop. Bots are people too. Rewards were proportional to costs and value Liquidswap received, so no one is at a loss with this methodology.

As a standard sybil detection measure, a minimum threshold of 5 swaps, $250 traded volume OR $100 for 1 year added liquidity was added in order to remove bot addresses spamming the protocol. Any addresses receiving less than 1 LSD were also removed. This left 57K wallets in consideration for the airdrop. The general assumed a trend for bots was spamming low cost addresses in order to receive a minimum allocation of airdrop.

There are still likely to be bot accounts above these thresholds, therefore a greater final proportion of costs were given to categories that were less likely to have bots: middle class users, and users that qualify for bonus categories.

We also specifically removed some addresses that were company associated accounts or partner accounts.

Wallet Maximums & Redistribution to Middle Class

After running numerous simulations in max allocations, we settled on a 8,400 LSD cap. This cap allows us to give an appropriate reward to a large portion of the community while also acknowledging the huge amount of volume and liquidity a select few made on our app. The individual maximum amount that a wallet could receive was capped at 8400 LSD tokens.

All tokens over the maximum were redistributed to all wallets that are underneath the whale maximum cap. We hypothesize these are the most valuable users that don’t exceed the whale cap. This redistribution range was chosen based on the hypothesis that the most valuable users are in this ‘middle class’ of users.

The redistribution to ‘middle class’ users was allocated on a standard polynomial curve in order to allocate less to smaller users where bot distribution is likely to be higher and less to large cost users where a redistribution would be less impactful to proportion of cost.

Below is a view of the distribution per wallet on the 57K wallets within the range of redistribution.

Referrals:

A referral bonus of 10% is applied for the trading volume and added liquidity of referred users. This means if you referred a user and they traded $100, then your own account is attributed $10.

Users can continue sharing their referral link for future rewards and airdrop calculations.

Analysis:

The allocations and bonuses to the community category gave these users a higher proportion of costs. The chart below maps wallet index to allocations. The area under the curve is the sum of the allocation to users. Most airdrop distributions are weighted heavily towards large whale accounts and bots.

The transformations done to favor the community and ‘middle class’ users widened the curve to make the slop of cumulative allocations across wallet index less steep. This means many smaller users received additional allocations that would have otherwise gone to whales, non-community users or bots.

The chart below is zoomed in on a portion of the entire distribution. From this chart, it is evident that clusters of community members in color are receiving a larger proportion of costs that non-community members in gray.

Below are the mean and median proportions of costs (ROI) broken down by different categories (the list is not exhaustive)

Any issues?:

If you believe your address qualified for the airdrop and you are having issues with claims, please fill out this form:

https://form.typeform.com/to/D9w3pLSA

Legal

THIS IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO PURCHASE ANY LSD, AND IS NOT AN OFFERING, ADVERTISEMENT, SOLICITATION, CONFIRMATION, STATEMENT OR ANY FINANCIAL PROMOTION THAT CAN BE CONSTRUED AS AN INVITATION OR INDUCEMENT TO ENGAGE IN ANY INVESTMENT ACTIVITY OR SIMILAR. YOU SHOULD NOT RELY ON THE CONTENT HEREIN FOR ADVICE OF ANY KIND, INCLUDING LEGAL, INVESTMENT, FINANCIAL, TAX, OR OTHER PROFESSIONAL ADVICE, AND SUCH CONTENT IS NOT A SUBSTITUTE FOR ADVICE FROM A QUALIFIED PROFESSIONAL.

THIS DOCUMENT CONTAINS HYPOTHETICAL, FORWARD-LOOKING, AND/OR PROJECTED FIGURES, WHICH ARE NOT GUARANTEED AND ARE SUBJECT TO CHANGE; ACTUAL NUMBERS MAY VARY. PONTEM AND ITS SUBSIDIARIES MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE COMPLETENESS, RELIABILITY, VALIDITY, OR ACCURACY OF THIS INFORMATION. THE CONTENT HEREIN IS NOT ERROR-FREE AND MAY CONTAIN INCORRECT INFORMATION. YOU AGREE AND ACKNOWLEDGE THAT ANY INFORMATION CONTAINED HEREIN IS SUBJECT TO CHANGE WITHOUT NOTICE. NO ADVICE OR INFORMATION, WHETHER ORAL OR WRITTEN, OBTAINED FROM PONTEM, WILL BE CONSTRUED TO CREATE ANY WARRANTY OR REPRESENTATION NOT EXPRESSLY MADE HEREIN.