Token airdrops have become a staple in Web3.
Early-stage protocols use them to kickstart token circulation and acquire holders/users. In some instances, airdrops or the expectation of one in the future are also used to incentivize participation during the development phase of a protocol.
Established protocols with thriving communities too revert to the art of airdropping tokens. Again, the motivation is either to reward existing community members or to find fresh blood.
However, there is an operational hiccup in terms of finding solutions for bulk transaction processing. Most protocols, with the necessary resources, fork their own and this requires, more often than not, a movement of the tokens outside of community-controlled treasuries to core teams in the interim. Essentially, this is, even for a brief time, reversing decentralization.
Enter The Dual Finance Airdrop Plugin on Realms
Recognizing this need, Dual Finance has developed and integrated a plugin that allows any decentralized community on Realms to pass a proposal with instructions to carry out a token airdrop. Once the proposal is passed & executed, the community’s Realms treasury is debited by the tokens to be airdropped, and, depending on the route taken, whitelisted wallets either receive tokens or could claim them on the Dual Finance protocol itself.
Interested? Here is a step-by-step guide.
Step 1 — Generating The Merkle Root
Head over to https://beta.dual.finance/upload and connect your wallet. Click on “select file” and upload a CSV containing wallets and amounts without any header. This will generate a Merkle root and the next steps will showcase why this is important.
Step 2 — Making The Proposal
Go to your community DAO on Realms, connect your wallet with governance power & press “New Proposal.”
Write up your proposal title & description like you usually do. It is important that you mention that this proposal is with instruction, that is, the passage of the proposal allows the proposer to execute the transaction.
Step 3 — Adding The Instruction
After writing your proposal title and description, scroll down to the transaction interface. Once here, you have to choose the Dual Finance Airdrop from the drop-down menu for the instruction type.
Once selected, the interface will expand and require inputs to the airdrop as follows:
- Airdrop Type: Choose Merkle Proof
- Root: Insert the root address generated in Step 1.
- Total Number of Tokens: This is the total airdrop amount.
- Treasury: This is the Realms treasury account that holds the token that needs to be airdropped.
Add the proposal & you are all set.
Step 4 — Claiming The Airdrop
On passage of the proposal, the initiator will finalize the proposal & execute the instruction which will move the tokens from the DAO’s Realms Treasury to a vault held by the airdrop program. The airdrop is now ready for “claim” whereby whitelisted wallets can head to https://beta.dual.finance/airdrop, connect their wallet and choose the airdrop they want to claim from the drop-down menu.
When a user hits the claim button and verifies the transaction when prompted, the airdrop vault on Dual Finance is debited and the claimant’s wallet is credited with the tokens. Here is a short demo of the claim process in action.
Note: The example above uses the Merkle distributor as a verifier, that is, involves a claim process similar to how one would mint an NFT by checking eligibility against a list of wallets. The Dual Finance Airdrop vaults support a crank airdrop as well where the tokens can be directly airdropped to a list of wallets. You may read up on the design specs & strengths of their airdrop vaults here or alternatively reach out to their team through Discord for the best approach for you.
Playing With Staking Options
It is interesting to note that apart from airdropping spot SPL tokens, the airdrop program supports Dual Finance powered Staking Options as well. You can read all about Staking Options here and how they are great for gamification of airdrops but most importantly how they serve to incentivize community building & rewards in a more economically efficient way.
This route adds an extra layer whereby a claimant will have to first claim the airdrop of staking options & then exercise them to get the SPL tokens. The end result is similar except that claimants have to pay some amount of exercise fee (could theoretically be $0.00001 per token or even lower) and gas a second time (thankfully Solana makes this frictionless).
For an airdrop of staking options, the process to set it up becomes a two-part proposal; one to generate the staking options & the other to do the airdrop. Having covered the airdrop feature, here is a step-by-step guide on generating staking options directly from Realms.
Step 1 — Making The Proposal
Go to your community DAO on Realms, connect your wallet with governance power & press “New Proposal.”
Step 2 — The Inputs
Scroll down to the instructions interface & insert the inputs to design your staking options:
- Name: A generic identifier for the particular issue of staking options.
- Base Treasury: The token wallet on the Realms treasury that will be debited to fund the Staking Option Vault at Dual Finance.
- Quote Treasury: The token wallet on the Realms treasury that will receive the exercise fee.
- Quantity: The number of tokens in the staking options. Units are in atoms of the base token.
- Expiration: The Unix timestamp as to when the options expire.
- Strike: Strike price for the staking options. Units are quoted atoms per lot.
- Lot Size: This is the minimum size of an option.
- Payer Account: The treasury account that will pay the gas for the transaction.
- Recipient Public Key: The Realms Treasury Address.
Once the proposal is finalized and executed, the token wallet will be debited and a new token account with the staking options will be created and credited with the receipt. You can now proceed to make an airdrop proposal as described earlier.
Conclusion
The Dual Finance Airdrop plugin on Realms is an operationally efficient mechanism for decentralized communities to reward existing members or attract new ones. The fact that it works directly from Realms ensures there is no loss of decentralization in the process while galvanizing these initiatives through community participation. The gamification and goal alignment afforded by staking options and the ability to airdrop them like any SPL token is also an interesting vertical for decentralized communities to explore.
While You’re Here:
The Dual Finance team continues to ship more functionalities integrated with Realms and is one of the most vibrant users (Dual DAO) and proponents of SPL governance. There are numerous ways you can leverage their toolkit for your own community. These are:
- Exercise: A community can exercise staking options held on its Realms treasury.
- Withdraw: A community can vote to withdraw the collateral (spot tokens) underlying the options it has issued.
- Liquid Staking Options — Treasury management solutions for your DAO powered by Dual Investment Pools.
- Governance Protocols — Participation in governance as a community in other DAOs with options to deposit votes, delegate votes and withdraw delegation.
- Proof of Governance: An innovative solution that airdrops staking options to members of the DAO by verifying their votes — an excellent way to reward participation in governance, especially for new communities. You can find more information here.
For tailor-made solutions and assistance, you may reach out to the Dual Finance team through their discord.
Disclaimer: The intent of this post is educational in nature. The views presented herein, if any, are the personal opinion of the author & do not represent that of his employer nor are financial advice. Please do your own research before investing in or using any product mentioned in the post. The author may or may not be invested in any particular product.
