Cons of an At-Launch Airdrop (Not a Pre Launch)

There are many benefits of a prelaunch airdrop as outlined and commented on extensively.

So what are the potential negatives? I see 2 very obvious ones:

  1. The community getting watered down by fair weather friends :joy:who aped-in only to interact so they can potentially be eligible and then promptly leave after getting their tokens and stop being active.

  2. Negative price action after the drop due to the flood of supply with out any utility.

These are the only 2 I can think of offhand. Maybe there are more the Indigo team and community can point out? I’m sure there are more nuanced legal and technical reasons I’m not smart enough to think of.

But I still feel that an early airdrop will be better because these negative effects are only felt early and become less effective as time goes on. The long term negative effects of:

  1. will tend to zero because after the influx and the outflux, the community will still be made of the OG diamonds but will also be made of those members who aped in but then stayed because they became educated and hardened their hands.

  2. will also tend to zero because after the initial supply glut and price volatility, the tokens will mostly end up in harder hands anyway. Perhaps there are plans for limited utility, like staking, to begin with…

Then, when v1 launch happens the community will be stronger and the token holders will be ready to benefit from Indigo.

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I agree with what you’re saying.
However, I think the way that this forum tries to foster long-term discussion is a good way to reduce the noise compared to only having to join a Discord server and maybe spamming some “gm”'s into a channel.
I’ll be completely honest: I first paid real attention to Indy after I heard about the airdrop.
Then I thought about what to do to be eligible. Because of this forum I thought the best way would be to start reading up and write some comments that have enough thought behind them to not be deleted by moderators.
And through that process I genuinely got interested in the project and will stick around for other reasons.
They have Jedi mind-tricked me :slight_smile:

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Cool! You’re educating yourself and you hands are harder :joy: Welcome to the community! Indigo is going to do some really amazing things once launched! Stick around! Be helpful and nice and I’m sure we’ll both be breathing that rarefied lunar air!:grin:

As I mentioned on discord, I would lean towards airdrop at launch as well. This leads to a sense of excitement and community engagement at launch. Yes, some people will sell immediately but the vast majority of your early supporters I believe will hodl.

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Good points! To counter; firstly, I don’t feel the community has been watered down as such because of the great questions, conversations and suggestions we’ve shared so far. Of course there are people who pop in and out once in a while to make sure they don’t miss out on an airdrop :laughing:.

Secondly, I don’t believe they’d be a dump as such because Indigo is such a quality project people would look to accumulate as much as possible and the number of tokens are really limited.

I like the airdrop to be at launch, but maybe have a vesting period🤷🏼‍♂️? It could be staggered or a short 3-6 months. People that believe will be holding longer than that anyways.

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Perhaps we should open a discussion about the benefits of a post-launch token distribution:

  1. Indigo rewards those who participate in the protocol by distributing INDY to them. An additional post-launch token distribution further incentivizes people to use the protocol early on and rewards them for doing so.

  2. Word of mouth about the token distribution will serve as a method to promote Indigo to a larger user base. New users who discover Indigo will be able to immediately go and use a functioning and well established product.

  3. The Cardano ecosystem will have matured and more options will be available for fair token distribution.

Furthermore, let’s define some core values of a token distribution:

  1. Rewards early community
  2. Builds project loyalty
  3. Marketing exposure & engagement
  4. Improves decentralization
  5. Avoids rewards gamification
  6. Limits developer team effort

A post-launch token distribution sufficiently meets all of these values.

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I’m a little torn between the 2 decisions. But I do believe that decentralized projects should try to find a good solution to reward early users…

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it’s a bit difficult to judge a token’s price before the public decides the price, I believe even without giving initial capital in the market with airdrop the prices will form.

pre-launch airdrop will not occur, it will only happen at-launch of the v1 Indigo protocol. Since it’s a utility token, it needs utility for viability. If the token is launched before the v1 protocol launch, then it would be considered a security.

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Has there been any discussion on the pros/cons of breaking up the airdrop distribution between a pre-launch and a post-launch to address the best aspects of both approaches?

I suppose it’s more appropriate now to weigh the pros/cons of an at-launch airdrop now. Though, it seems the analysis is close to identical (relative to pre-launch), imo. I still believe it depends on who the airdrop is given to (speculators vs adopters).

Airdrops all have the same flaws, pre launch or post launch, the reality is that a good portion of users will and can sell their airdropped tokens, now this is not a bad thing, providing community engagement and a solid project is under the hood.

Price action is required in a thriving project, and somethings price action can lead to increased growth.

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I wrote this piece without taking note of the fact that the vote will be either

  1. Distribution AT launch
    OR
  2. Distribution 1 year post Launch

So the title - “Cons of Pre Launch Airdrop” is incorrect and misleading (I’ve corrected that)! Sorry about that :sweat_smile:. So my point about limited utility becomes moot. @defiroose’s point about more options further along is well made. I think having a hybrid approach of the 2 options will serve everyone. An at-launch airdrop will reward early community who will feel validated for their recognition and confidence in Indigo’s value to the larger Cardano community AND another airdrop later on will incentivise further community growth and participation, especially as new features and options are developed.

If there is a spectrum between these two approaches and you don’t divulge the details of who/how the airdrops will occur, then it also allow you, the Indigo team, to slide the slider as close to each extreme as you like with out breaking confidence in the community. You can tweak it to your exact requirements! But then again, maybe you’ve already given yourself that freedom by using the words “Begin INDY distribution…” :wink:

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Thanks for the clarification. You make some very good points. I’m still debating which way to vote but love the insight.

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Looks like At-Launch is great option too.

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I am leaning toward at launch airdrop. Will make so much more buzz than pre launch.

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Definitely agree with at-launch.

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I thing the at and post launch launch prons are matches all around :joy: the comments. I think the polls will be the tight tug of wars. Between them on the coming voting polls.

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If I had to wager I would think at launch will win over post launch for airdrop.

My guess is ~50% of early adopters want tokens ASAP to participate in the protocol when it launches.

The secondary wave of participants will also vote for at launch so they can scoop up supply from those who choose to dump.

The gambler in me would put the odds at 70%-30% in favor of an at launch release. Interested to see what the initial votes show Feb 23rd. Hopefully we will be able to see the metrics as the voting progresses during the allotted period.

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