Airdrop Maximalism: Why We Chose Not to Do an ICO

Photo by SpaceX

When we first began working on the Zulu Republic architecture in mid-2017, ICOs had already begun to explode in popularity as the ‘it’ thing for financing blockchain and cryptocurrency startups. In many ways they still are, despite the increasing regulatory spotlight and the stank of bad publicity from a multitude of scammy get rich quick schemes and the outright incompetence of many proposals.

The promise and the peril of ICOs

Of course, ICOs can be a valuable tool for genuinely exciting projects, and there are many good reasons for a team to stage one that don’t involve a bad faith rush for gold. For the first time in history, innovators and entrepreneurs can raise easy, quick startup capital independently, directly from everyday people no matter where they live, how wealthy they are, or whether or not they’ve achieved accredited investor status. Those traditionally marginalized from the world of venture capital can contribute to projects they believe in and possibly earn a significant return in the process.

But the culture of greed and deception is undeniable in the ICO space, leading many would-be blockchain believers to turn a skeptical eye towards otherwise promising projects that choose to raise funding in this way. In 2017, 4 to 5.6 billion dollars was raised through ICOs, an impressive feat for any budding industry, and yet it’s estimated that 84% of the largest ICOs have essentially been scams, with only 8% of ICO tokens actually going on to trade on an exchange. Once this small percentage of tokens does hit the exchanges, it’s often difficult for them to sustain their initial offering price since many projects are raising way more money than they need or would traditionally raise in venture capital, significantly inflating their value compared to the promise and development status of their technology.

Of course, none of this has gone unnoticed by the powers that be. Everyone in the industry knew the regulators would eventually come running, and indeed they have, making it harder and harder for teams to offer an ICO without running afoul of securities regulations (or without spending a lot of time and money to satisfy them). In an effort to protect amateur investors, many traditional web marketing gatekeepers (i.e. Google, Facebook, Twitter, Mailchimp) have also been cracking down on ICOs, making it increasingly difficult for teams to reach an audience.

From ICO to airdrop

Although we’d been planning to conduct our own token sale, we came around to the idea that our project would be better served by forgoing an ICO in favor of a free token airdrop only. Instead of buying ZTX tokens in an ICO, anyone can sign up and get ZTX deposited into their Zulu Republic wallet for free. Not only does this allow us to avoid the negative impacts of the issues mentioned above, it makes sense for our project for the following reasons:

1. Equal Access

By offering ZTX freely to anyone with an email address, we can align our token distribution model with our core philosophy, maintaining the spirit of democratization and grassroots collaboration. It allows us to achieve the widest possible dissemination of ZTX rather than letting it get concentrated into the hands of those few with the resources to buy a lot of tokens. By minimizing the burden of participation (many Airdrops make you stake ETH to get tokens), people can receive ZTX completely free of charge and we can focus on community over profit while we launch the Zulu Republic ecosystem. Open access and open source are core principles of the blockchain revolution and indeed the original vision of the internet in general.

2. Development efficiency

Going airdrop-only also allows us to focus on what’s important — actually building the technology — instead of getting distracted by all the noise and hurdles that come with holding an ICO. Think of how many talented teams have been wasting time preparing for ICO instead of actually building their solutions and moving the industry forward. Now we can take the time and energy to make sure we do things right. We can work on proving the value of the project and generating real utility.

3. Savings

Running an ICO is expensive. Tighter regulation means higher legal advisory fees, and reduced access to social media marketing involves higher costs for other avenues of promotion. By not running an ICO we can redirect these funds to product development and community outreach.

4. Sufficiency of private funding

Perhaps most importantly, we don’t actually need to hold an ICO. Since we first began building the Zulu Republic ecosystem, we’ve been fortunate to secure enough private funding from people who already believe in what we’re building. Raising millions more via token sale will just make us yet another over-valued blockchain project spending publicly raised funds inefficiently rather than prioritizing product development.


In the end, the increasing scrutiny over token offerings will probably be a good thing for the industry, helping to weed out the most risky and misconceived projects. However, it could also have a stifling effect on innovation as smaller, less well-known (but still talented) teams lose access to this avenue of funding. It will be interesting to see how these dynamics play out over the next couple of years, but for our part, we hope to show that it’s possible for a successful blockchain project to ditch the ICO phase completely.


To pre-register for the ZTX Airdrop, sign up at Zulu Republic and enable 2-factor authentication. You’ll be notified by email when the airdrop is live and you can sign in to claim your free tokens.