Basic Principles on Airdrop Distribution

Hello,

In my proposal, I’ll focus solely on core principles without delving into specific numerical airdrop designs, as I believe that doesn’t make any sense. Designing such a proposal requires extensive data analysis and consideration of numerous factors. Therefore, outlining the general framework feels like the more appropriate approach.

1) Creation of Separate Airdrop Pools:
One of the most common mistakes in airdrop designs is lumping whales and small fish into the same category for distribution. By introducing two distinct SBTs, LXP and LXP-L, Linea has already taken a positive step by distinguishing between these groups. Two separate airdrop pools should be created for LXP and LXP-L, with unique evaluation criteria tailored to each.

2) Linear Distribution for LXP-L
The distribution of LXP-L should follow a linear model. Implementing a tier system for liquidity providers would discourage them and undermine the incentive to contribute liquidity. Money has its own cost. If the network rewards a user providing $45M in liquidity the same as someone providing $75K, it risks losing future liquidity, which could render the DeFi ecosystem inefficient. Nobody wants to pay 5% slippage for a simple swap, right? While a cap could be considered, it still should be set high enough to properly reward large liquidity providers.

3) Broader Pool for LXP:
Since the airdrop distribution in the LXP pool will be non-linear and will reward significantly more wallets above a certain level compared to the LXP-L pool, the LXP airdrop pool should be larger than the LXP-L pool.

4) Tier System & Multiplier for LXP Distribution:
Two of the most-discussed methods for LXP distribution are the tier system and the multiplier approach.

The tier system, combined with a proper threshold, can help prevent value extraction from sybil attacks, especially those that emerged with Linea Park after the Dencun upgrade. However, the disadvantage of a simple tier system is that it assigns the same value to each LXP, meaning a person who earned 2000 LXP through Defi Voyage before Dencun (paying higher fees) is treated the same as someone who earned 2000 LXP after Dencun through Linea Park and Culture Szn. This disadvantage could be resolved by applying a multiplier to the LXP earned before Dencun.

As a result, implementing both the tier system and a multiplier could make the distribution in the LXP airdrop pool fairer and more appropriate. First, a multiplier would be applied to the LXP earned before Dencun to create a new ranking (Including the LXP earned from tasks completed before the Dencun upgrade in Linea Park). Then, a tier system could be applied to this new ranking with an appropriate threshold. This would make it harder for Sybil accounts to extract value via airdrop by accumulating LXP with multiple wallets, especially after benefiting from cheaper gas fees post-Dencun.

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