Cryptocurrency exchange Binance has released a new report detailing several inefficiencies around airdrops and possible lessons to apply moving forward.
According to the exchange, the affected airdrops fall into two categories. The first type is retroactive, where projects typically surprise existing users with rewards.
The second group is the engagement airdrops, which are pre-announced events designed to attract new users and fit emerging projects. Depending on the project stage, both airdrops focus on different goals.
Regarding the lessons from existing inefficiencies, the exchange’s Where Are Our Airdrops Going? highlighted some challenges affecting this type of token distribution, such as planning inefficiencies, insider allocation concerns, and technical issues.
Reduced allocations
The first problem cited in the Binance Research March 2025 report was last-minute allocation reduction, of which the Redstone airdrop is an ideal example. Before the official distribution, the team lowered the initial community portion from 9.5% to 5%.
Consequently, there was a massive backlash from community members, with concerns about the unfair treatment of users. The report cautioned that such abrupt changes signal poor planning, which erodes community trust.
As a lesson, Binance recommended locking in token allocations before the Token Generation Event (TGE), avoiding unilateral decisions, and engaging key stakeholders, like investors and community members, to promote transparency in communication.
Opaque eligibility
Another identified mistake is the opaque eligibility criteria, which can lead to allegations of favoritism and unmet expectations. For this pitfall, Binance pointed to Scroll’s October 2024 airdrop of 70 million SCR tokens (7% of its supply).
While the airdrop intended to reward mainnet activity like transaction volume and dApp engagement, the October 19, 2024, snapshot left users puzzled due to undisclosed rules and inconsistent reward distribution.
To address this, the report suggested that projects outline participation rules leveraging tools like on-chain monitoring or proof-of-humanity to deter Sybil farming, where individuals create multiple fake accounts to exploit token distributions.
Insider & influencer-heavy distributions
Another lingering pain point with airdrops is insider- and influencer-heavy distributions, where projects prioritize their teams, investors, and VCs over the community.
The most recent project to face such backlash was KAITO’s February 2025 airdrop. Interestingly, the platform allocated 43.3% to its team and investors, with only 10% to the community, alongside large influencer payouts. In this case, influencers reportedly dumped their tokens, leading to scrutiny over KAITO’ sKAITO’s insider focus.
While acknowledging the need to fund development, Binance noted that excessive allocations to insiders can destabilize token prices and alienate supporters. The report called for vesting periods and lock-ups to curb immediate sell-offs, aligning all parties with the project’s long-term vision.
Technical barriers
Lastly, technical barriers in claim processes, such as those experienced in Magic Eden’s December 2024 airdrop, undermine user onboarding. The airdrop aimed to promote Magic Eden’s mobile wallet but was marred by glitches and unclear instructions, leading to widespread frustration among community members.
To address this issue, Binance emphasized the importance of a smooth, intuitive claim process, warning that technical issues can slash payouts and deter users from further engagement with the project.
Looking ahead, the report recommended increasing transparency, involving the community more, and improving monitoring to refine airdrop strategies in the future.
