Ethereum's EIP-1559 burns base fees, creating deflationary pressure during high network usage periods.
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Liquidity providers are critical to a protocol’s health, as they supply the capital enabling trading, lending, or swaps. Rewarding LPs through airdrops incentivizes sustained liquidity and attracts more users. Projects see LPs as highly engaged participants who take financial risk, making them natural candidates for distribution. Additionally, LP activity reflects real commitment, reducing chances of sybil exploitation. Historical examples, like Uniswap’s UNI airdrop, highlight how rewarding LPs strengthens ecosystems and builds loyalty. For farmers, participating as an LP can be resource-intensive but highly rewarding when aligned with strong projects that value contributors in their airdrop criteria.
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Staking tokens in early-stage protocols can boost your airdrop eligibility. However, choose platforms with audited contracts to mitigate security risks. Monitor lock-up periods to avoid liquidity issues, especially in volatile markets where unstaking delays could cause significant losses.
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