Could NFA become the next big acronym in the crypto space?
Airdrops have become the bread and butter of the crypto world — for good reason.
They’re an indispensable marketing tool for up-and-coming projects that want to create a buzz around their ecosystems.
Done right, distributing free tokens to the public can help elevate demand — and unlock big benefits for recipients. After all, if these altcoins end up being listed on major exchanges at a later date, their value could explode.
Unfortunately though, downsides have started to emerge. These campaigns aren’t just reaching enthusiasts who passionately believe in what a project has to offer, but “airdrop hunters” who are merely scouring for ways to turn a quick profit.
Airdrop hunters typically want to sell off the tokens they’ve received for free — as soon as they can. And for cryptocurrency projects at their very early stages, this can be bad news — undermining carefully cultivated tokenomics and causing the value of a coin to fall.
The current bear market has also unearthed another problem. Many projects are now postponing the schedules for unlocking new tokens — waiting until the economic climate improves slightly. And while this is usually in the best interests of a project and their investors in the long run, it can be disappointing news for those who won tokens in an airdrop. Why? Because they’re no longer able to freely trade or liquidate the digital assets they’re entitled to.
So… what’s the answer? Can airdrops be revitalized, eliminating some of the downsides that have emerged in recent years? And is there a way for hodlers to benefit — even if they haven’t got their hands on tokens just yet?
How NFTs can shake up airdrops
Right now, projects are attempting to walk this tightrope between gaining publicity and engaging in marketing strategies that could damage their ecosystems. How can you get new users to follow a Telegram or Twitter account in order to be eligible for an airdrop, and incentivize them to stay involved with the community long term?
Nonfungible airdrops — otherwise known as NFAs — could be the answer here. And, as you might expect, they incorporate some of the technology relied upon by NFTs to generate a “win-win” situation for projects and airdrop winners alike.
NFAs aim to represent the true value of an airdrop reward when an initial DEX offering (otherwise known as an IDO) takes place. This is achieved through a model that’s not too dissimilar to a futures contract — an agreement to buy or sell assets that will be activated at a future date.
The only difference is that the project owner releasing the NFA makes a promise to deliver the token or other digital assets on a future launch date. And as each airdrop winner ends up receiving different rewards under this model, there’s a one-of-a-kind gift that’s nonfungible.
In this scenario, the nonfungible airdrop will boast a mechanism that allows holders to claim their tokens when a project launches — in effect, capturing the value of future tokens. Alternatively, it is possible to achieve instant returns by trading this NFA on a peer-to-peer marketplace. What makes this concept so compelling is that those who opt for an immediate transaction will miss out on perks in the long run.
Nonfungible airdrops can be equipped with exclusive avatars and special benefits, such as discounts and free trials on the goods and services offered by a crypto project. Holders could also be granted exclusive early access to future features — and better still, their tokens will be waiting for them when they launch.
Have your cake and eat it
Arken Finance says it is the mastermind of the world’s first nonfungible airdrop, a concept that has the potential to shake up the DeFi landscape immeasurably.
The DeFi trading portal can be found across eight networks — and its goal is to arm investors with a greater number of trading tools, all while reducing friction.
Arken had commenced an airdrop campaign back in November 2021, but this was postponed as the markets began to cool. Now, it’s pioneered NFAs as a way of igniting excitement about its future plans without falling into the common pitfalls of airdrops that have surfaced.
Now, 2,000 winners of its trading competition have been rewarded with their very own NFA — each storing a different amount of tokens, and each with different benefits. They’ll be able to reclaim this cryptocurrency at a later date, but there’s plenty of exclusive advantages to keep them occupied in the meantime.
“The team strongly believes in this application and is confident that this technology can be marketed to DeFi project owners in the future,” Arken said in a recent blog post.
And while enthusiasts may have missed out on the chance to own one of the first-ever NFAs during the initial airdrop, the project says subsequent rounds are planned in the future.
Some of the perks include an exemption from fees for the first 24 hours of a trading competition — and NFA holders will have their own special tier in the contest. On this mini-competitive track, they’ll subsequently be entitled to separate rewards. In addition, exclusive insights and fast-lane customer support is provided through a VIP Discord channel, and owners will have a front-row seat to the premium features that Arken Finance has in the pipeline.
It’s a bold experiment, and one that could unleash new levels of loyalty in crypto projects that are getting off the ground for the first time. And for those who win airdrops, it delivers far more than tokens. Not only will they have a status symbol in the form of distinctive avatars that few members of the community own, but they’ll get an enhanced experience through VIP channels and front-of-the-line customer support. For those who really believe in a project’s potential, that’s gold dust in itself.
There’s excitement as Arken Finance’s cutting-edge experiment continues — and the project’s hoping that “NFA” will be the next acronym to become prolific in cryptocurrency circles.
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