In-depth analysis of the relationship between the first quarter airdrop of ether.fi and Loyalty Point (analysis data link included)

Data link:

• EtherFi participates in address analysis Thegraph: https://api.thegraph.com/subgraphs/name/web3mario/etherfi_airdrop_analyze
• All accounts receive airdrop results: https://cf-ipfs.com/ipfs/QmP2tgnrAyUGwRs1o6B8YGzHmnecyZrVhY5QiFCESxUsBv

In the previous article, the author discussed challenging users through Loyalty Point in the Web3 era. In this article, we choose a practical case to further demonstrate this point.

On March 18, 2024, Ether.Fi, the leader in the Restaking track, took the lead in TGE and conducted the first round of airdrops of its ETHFI tokens, bringing The wealth effect is not small. As of the time of writing, the price of $ETHFI has reached $5.54, and the fully stable market value has reached 5.5 billion US dollars. This valuation is very impressive for an early project whose core business has not yet been launched. This reflects investors’ recognition of the project’s prospects.

However, users have quite criticized the results of this round of airdrops, because for a long time in the past, EtherFi’s promotion focus and incentive mechanism have been around EtherFi Loyalty Point. Naturally, users would There is an association between receiving airdrops and accumulating Points. However, after the airdrop results were announced, many users found that there seemed to be no necessary relationship between the two. Many loyal users who had accumulated a lot of Points had similar rewards to some "lightly involved" users. They also found that many giant whales quickly took advantage of their financial advantages. A big airdrop allocation.

Since the author has spent some time analyzing the design ideas of the project side in this round of airdrop activities in detail from the data side, and locating the biggest beneficiaries of this round of airdrops, I hope it can help readers optimize their subsequent participation in similar airdrop competitions. strategy, and finally look forward to the possible design direction of EtherFi’s airdrop rules for the second quarter and estimate potential benefits. Therefore, the author spent some time analyzing the design ideas of the project side in this round of airdrop activities in detail from the data side, and locating the biggest beneficiaries of this round of airdrops. I hope it can help readers optimize their subsequent participation in similar airdrop competition strategies, and in Finally, we look forward to the possible design direction of EtherFi’s airdrop rules for the second quarter and estimate the potential benefits.

Review of EtherFi Season 1 Airdrop

First of all, let us review the officially disclosed rules of EtherFi Season 1 Airdrop:

• EAP: You participated in the Early Adopter Program
• ether.fan:You are the holder of ether.fan NFT
• Solo Staker:You are the ether.fi Solo Staker
• eETH / weETH:You hold eETH or weETH
• DeFi rewards: You participate in eETH or weETH DeFi pool or vault
• Badges: You unlock one or more ether.fi badges
• Referrals: You invite One or more new users participated in ether.fi

There is no direct description related to Loyalty Point, and the specific calculation algorithm is not clear. However, after our analysis of all the data, You can still find a fixed pattern from it.

TheGraph will implement EtherFi’s deployment of Liquidity Pool smart contracts starting from July 10, 2023, and the contract will last until March 18, 2024. Any participant can view all user addresses via TheGraph Query Link. We obtained these addresses through a Python crawler to obtain the airdrop situation, and have uploaded the results to IPFS. We hope that interested friends can analyze them by themselves. The analysis results are as follows:

1. A total of 82,102 participating addresses, of which a total of 71,380 addresses received airdrops;
2. Among all users who received airdrops, each user has an average of 536,444 Loyalty Points. , on average, each user receives 702 ETHFI airdrops;
3. On average, each user needs to accumulate 755 LoyaltyPoints to obtain 1 $ETHFI, that is, the $ETHFI conversion rate is 755 Loyalty Points/ETHFI.
4. The Matthew effect of the project is extremely obvious. Among all users who have received airdrops:
   • The top 20% of Loyalty Point users have received 94% of the total Loyalty Points. The airdrop volume accounted for 77.5% of the total airdrop volume;
   • Loyalty Point top 10% of users received Loyalty Point accounted for 87.8% of the total Loyalty Point volume, and the airdrop volume obtained accounted for 87.8% of the total airdrop volume. The proportion of Loyalty Points obtained by the top 5% of Loyalty Point users is 72.2%;
   • The proportion of Loyalty Points obtained by the top 5% of the total Loyalty Points is 79.2%, and the airdrop volume obtained accounts for 65.6% of the total airdrop volume;
5. The airdrop allocation mechanism of the project is more conducive to "lightly involved" users and "heavy loyal" users (usually whale users).

First of all, let’s take a look at the distribution of Loyalty Points obtained by users, as shown in Figure 1. The horizontal axis is the user’s Loyalty Point ranking, and the vertical axis is the amount of Loyalty Points held by the user. We can see The average amount of Loyalty Points obtained by each user is 536444, but at this time only the top 7588 users can reach such a standard. Compared with 82102 participants, this is a relatively small range, which means that giant whales Holds a large amount of Loyalty Points.

Next, let’s take a look at the distribution of the number of airdrops received by users. As shown in Figure 2, the horizontal axis is the user's Loyalty Point ranking, and the vertical axis is the $ETHFI airdrop amount received by the user. We can see that the average airdrop amount received by each user is 636. At this time, the top 6500 users can To achieve this standard, compared to the distribution of Loyalty Point, the distribution of airdrop numbers is more concentrated among top-ranked users.

Finally, let’s explore the scatter plot of the user’s Loyalty Points and the number of airdrops, as shown in Figure 3. The horizontal axis represents the user’s Loyalty Point amount, and the vertical axis represents the The user's $ETHFI airdrop conversion rate, that is, how many Loyalty Points are required to hold for each $ETHFI airdrop. We can find that Loyalty Point and airdrop conversion rate present an approximate rule of piecewise function. In the first piecewise function, the user’s airdrop acquisition rate is roughly proportional to Loyalty Point. The more Loyalty Points held, the corresponding The greater the airdrop conversion rate, this means that the Loyalty Points required to obtain a unit of $ETHFI airdrop will become higher and it will become more difficult to obtain them. When the Loyalty Points held by the user exceed approximately 200,000, the entire segmentation function enters the second part. This period reaches the peak, when the user's airdrop conversion rate is approximately 1140, which means that at this stage, the more Loyalty Points you hold will not further increase the difficulty of obtaining airdrops, which is more friendly to giant whales.

In order to better reflect this relationship, as shown in Figure 4, we transform the horizontal axis into the user's Loyalty Point ranking. The higher the user's ranking from left to right, The larger the value, the fewer Loyalty Points held. The vertical axis is the user’s $ETHFI airdrop conversion rate. The relationship is more obvious at this time. When the user's Loyalty Point ranking is around 14,500, the piecewise function is at a critical point.

Looking ahead to EtherFi’s second quarter airdrop

Next, let’s look ahead to EtherFi’s second quarter airdrop, which has already disclosed the relevant information about Season 2: StakeRank Details:

• StakeRank is a grading system with 8 levels or "tiers"
• Every 100 hours a user stakes ETH on ether.fi will increase by 1 level
• Each level has a progressively higher loyalty point rate increase
• Your staking balance needs to be higher than 0.1 eETH to continue to improve the ranking
• Users participating in the first season will start from the ranking II starts
• The ranking improvement range is 1x-2x (subject to change)
• Ether.Fan NFT holders are automatically upgraded to Rank III
• Each NFT Holders are only eligible once
• During the transition to Season 2, the protocol is designed to recognize Season 1 participants without disproportionally allocating Season 2 airdrops to them. To achieve this, everyone’s loyalty points accrual rate will increase by 10x. While this will dilute old points, they are still valid, subject to the following conditions.
• All eETH and weETH, whether held or DeFi positions, including Liquid, will be treated equally by StakeRank.
• If by the end of Season 2 your points total means 70% of it comes from points you accumulated in S1, then you are not eligible. However, the base rate of loyalty points will increase 10x in S2. Staking in S2 means your new points balance should be significantly greater than the amount collected in S1. That said, Season 1's Pledgers were recognized in Season 1. Season 2 will recognize stakers who were active in Season 2.

The overall plan is designed around the ranking of Loyalty Point, with different layers and different boosting effects set for each level. The most important thing is about the second season airdrop. The final guidance on the redemption method focuses on diluting the impact of Points obtained in the past on the final airdrop. This means that users who have accumulated a lot of Points will have a sharp reduction in the advantage of Season 2 airdrops, and loyal users will have to restart. And more importantly, EtherFi still chose to use a vague description to express the relationship between the final airdrop volume and Loyalty Point. This also introduces considerable uncertainty. Considering that in the design of the first season airdrop, the team seems to favor shallow participating users and whale users, which seems to have a certain guiding effect for users to participate in the second season airdrop activity. But don’t forget that the airdrop in the first quarter has already distributed 6% of ETHFI’s total issuance. In the second quarter, only 5% of the total airdrop is left.

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