Vitalik Buterin says crypto identity solutions could fix the biggest issues with airdrops

Crypto airdrops are known for handing out billions of dollars of value to those active in the ecosystem, but they're certainly not perfect.

Over the years, more and more people have tried gaming the system, using multiple wallets to "farm" airdrops ahead of time (a speculation game that has often paid off). This forced projects doing airdrops to become more stringent in their distribution — using onchain analytics to flush out such airdrop farmers — although this has often been at the expense of real users. As a result, airdrops have become more controversial, and bad airdrops can risk damaging a project's reputation.

Ethereum co-founder Vitalik Buterin reckons there's a solution. "Airdrops are a fascinating initial use case for ZK / blockchain-based identity/credential/attestation frameworks," Buterin posted on X, referring to zero-knowledge proof technology, which offers the ability to use cryptographic proofs to boost privacy.

Buterin noted that the goals of an airdrop are to distribute tokens to actual community members rather than farmers, to reward contributions to the project and to be reasonably egalitarian.

"These are exactly the properties that identity/credential/attestation frameworks are trying to achieve," he said. "Hence, for anyone building such frameworks, it makes perfect sense to use token issuance as an initial use case to beta-test and refine their work in an adversarial environment."

When asked about the biggest hurdles to this approach, he added, "I don't think there's any one solution, I think it's a multi-factor thing that will have to evolve over time. It's an inherently hard problem, but it's a super rewarding one, because if we solve it, that solution could naturally be exported to much better reward all kinds of currently-uncompensated work in our economy across all of humanity."

Buterin also said that tokens don't need to be given out for free; discounted sales are also an option. For instance, a community member's contribution to the project could help determine the number of tokens they can buy at a discount.