The Powerful New Tool for Building a Community
LiquidApps’ Air-HODL Model for Vesting Token Drops Can Encourage Users to Engage and Connect
We recently launched our unique DAPP token Air-HODL — a token airdrop that includes a vesting mechanism — as a way of both rewarding the EOS community and accelerating the growth of the DAPP Network. The Air-HODL is designed to align the incentives of the DAPP Network’s stakeholders with its long-term sustainability. Not only does this unique mechanism represent a significant evolution in tokenomic models, it is also an innovative tool that can be utilized by other community-building initiatives.
How Vesting Solves The Airdrop Problem
Airdrops, which distribute tokens to eligible wallets for free, have become a favorite among EOS projects looking to bootstrap an ecosystem.
However, by giving away a lump sum of free tokens immediately, these projects are hindering the longevity of their network. Wallet holders, who open their accounts to find newly-airdropped tokens, are incentivized to offload their tokens for a quick return before the selling starts to cascade.
With its revolutionary Air-HODL, LiquidApps enhanced the common airdrop with a vesting mechanism. Every EOS holder at block #36,568,000 on the EOS mainnet is already receiving Air-HODLed DAPP tokens (DAPPHDL) which will be continuously vested on a block-by-block basis over a period of 2 years.
But there’s a twist: If you sell or transfer your DAPPHDL, you will only receive the vested portion. The remainder of the unvested DAPPHDL tokens is then distributed to those who decided to HODL their tokens. Vested tokens can, however, be staked to DAPP Service Providers’ (DSPs) service packages on the DAPP Network without it constituting a withdrawal of the tokens.
The LiquidApps’ Air-HODL, an industry-first, was designed to prioritize long-term DAPP Network stakeholders — dApp developers, DSPs, and users — over those who are more focused on the short term gain.
Nudge Nudge, Wink Wink
Let’s take a look at how community members make decisions.
Beginning in the late ‘60s, two young professors at Jerusalem’s Hebrew University introduced us to the field of Behavioral Economics, disproving the assumption that human beings are rational creatures. Daniel Kahneman and Amos Tversky showed that we are, in the words of Dan Ariely, “predictably irrational”: prone to a host of cognitive biases which impact our decision-making processes.
In addition to studying the systematic patterns in which humans deviate from rationality, behavioral economists occupy themselves with countering this deficiency by designing choices in such a way that they encourage consumers to select a favorable outcome.
Nudge Theory, devised by Nobel Laureate Richard Thaler and Harvard Law Professor Cass Sunstein, describes how subtle shifts in the way we present a set of choices can impact the eventual course of action taken by a consumer. For example, the “Save More Tomorrow” initiative, architected by Thaler and fellow behavioral economist Shlomo Benartzi, utilizes nudges to help workers save for retirement.
Example Uses of the Air-HODL
As blockchains look for innovative ways to grow the community, harnessing the power of nudges is an effective way of getting stakeholders to cooperate for the wellbeing of the network.
The Air-HODL model could nudge participants in a range of different domains such as:
- Self-sustaining networks. A vested airdrop incentivizes an ecosystem of stakeholders, beyond the primary users of a network, by creating a situation where they all have skin in the game. These stakeholders know that in order to maximize the utility of their Air-HODLed tokens, they need to both wait until the conclusion of the vesting period and work to accelerate the growth of the network.
- Multiplayer games. Air-HODLs need not be confined to utility tokens only. They could become the favored means of distributing non-fungible in-game items such as unique weapons, vehicles, and armor to early adopters of massively multiplayer online role-playing games (MMORPG). Selling or transferring Air-HODLed items would cause players to forfeit the right to receive future allocations or upgrades, thus encouraging them to use their items for gameplay instead of selling them on NFT marketplaces.
- Cooperative communities. Co-ops offer a third alternative to the capitalist and socialist models by granting collective ownership to its members. A cooperative enterprise on the blockchain could include a native token in its design to drive the collective ecosystem (e.g. to buy goods, pay for services and vote in governance proposals). During the vesting period, Air-HODL beneficiaries are incentivized to be proactive in accelerating the growth of their co-op by bringing outsiders into the fold.
Blockchain networks looking to scale must contend with the tension token holders face between short-term speculative gain and extended community building. Since users are subject to a range of cognitive biases, it falls to the designers of a network to nudge them in the direction of beneficial behavior. LiquidApps’ Air-HODL enables these network architects to incentivize their users to stick around and contribute to the growth of their ecosystems.
We can’t wait to see what the future HODLs.