Eric Siu breaks down how token airdrops work as a business tool using SOS and ENS as examples. SOS hit a $271 million market cap by rewarding OpenSea users, while ENS gave tokens to everyone who'd registered a domain, aligning user incentives with the platform's success. Timing matters: ENS launched on Christmas Eve when fewer people were watching.
Today, we are going to talk about why airdrops have big implications for business and marketing in general. So the one token, the one airdrop I want to talk about actually happened Christmas Eve of 2021. And that airdrop is SOS. So we're looking at my screen right now. And SOS is the token for the largest NFT community to pay tribute, to protect, to promote. Okay. A couple other things here. So 20% of SOS is allocated to OpenDAO, which is a decentralized autonomous organization, to compensate verified scam victims on OpenSea with SOS, support emerging artists and their original work, support NFT communities, support art preservation, developer grant for participating in the SOS ecosystem. So, you know, here's the thing, like if you used OpenSea at all, which is kind of like an eBay for eBay for NFTs, well, then you get SOS, right? And so I, I mean, I got about 400 million or so. And by the way, it's not like a lot, right? Because the token right now is worth like, you know, 0.000006981, right, right here. So look, I mean, here's the thing though, like you can't, you can't doubt the fact that look, it launched over here and then all of a sudden You know, it shot up to about a $271 million market cap right now. I mean, it's when you look at some of the what some of the people are doing. So Pranksy, who's kind of big in the NFT world, so he says full transparency: I was airdropped 43 billion after 11,000 ETH buy volume on OpenSea. Pulled on Uniswap and Sushi. I then bought 30 billion more to get me back to 50 billion plus pools, and then Uniswap was eaten. So I then went up to 60 billion, then bought 40 billion more in the last dip. Current position is 100 billion SOS and 7% of the Sushi pool. So I mean, he's bullish about it. And so, you know, the Discord has 50,000 members and 100,000 people are following OpenDAO. And, you know, the thing here, I mean, you know, forget about the money for a second. What's important is kind of the implications from, from a marketing and business perspective. Okay. So let's look at what Alexis Ohanian said on Twitter. So founder of Reddit, you can see right here, okay, before the VC think pieces start. So these airdrops like Ian asked before, so Ethereum Name Service, Flip the script on how everyone's going to value their time plus spending time online. So you're rewarded for using. So that's big, right? When you think about incentives, when you think about what people say, show me the incentive and I'll show you the outcome. Well, now if you're actually using the— like ENS as an example, right? So I'm using ENS. I have 3 ENS names or maybe 4 or so. And you use it. Well, the more you use it, the more the coin goes up or the more you talk about it, the more the coin goes up. And what happens is then you're actually more incentivized to continue to use it and also to continue to talk about it more, because the more the company is successful, the more you are successful as well. It's not exactly equity, but it kind of works like equity, right? You don't get equity in the company, but what you're doing is it's, it's in effect equity, right? So airdropping things that actually have utility like ENS or SOS in this case, and there's like a good mission behind it, there's a good why behind it, then that's actually interesting, right? So, you know, you can reward the correct behaviors that you're looking for. And if I'm using SOS, it appreciates quite a bit. And maybe I need to go buy a car or maybe I need to pay for personal expenses or something like that. I can take that money out or maybe I can take a loan against that, right? If I don't want to take it out, but I can take that money out and then I've basically cashed out, right? Or I can continue riding the wave and maybe, maybe I become a really big influencer and then maybe I'm the one that's out there kind of continuing to talk about it. And maybe at some point, you know, SOS wants to do some type of partnership with me, right? Because I'm kind of the leading kind of influencer out there pushing stuff, right? And so, you know, when you think about building a company now, that's going to change quite a bit. Should the company be launching a token at the same time? Or if not, maybe the company should figure out product-market fit first, get some things right. And then maybe after that, once they start to build some semblance of audience, some semblance of community, They can launch their token and then their token is going to appreciate because the product is continuing to grow and the community is continuing to grow. So if I'm a HubSpot, as an example right now, that's an extreme example because if you're a publicly traded company, you'll probably get in trouble for launching a token like that. So, you know, let's, let's just use them as an example. Let's say the SEC isn't going to take a look at them. Right. But in this case, whoa, it's like, hey, the HubSpot community is vibrant and I want to continue to help it grow. I want to continue to talk about it. I want my token to be worth more. So, okay, great. Then the token actually— the tokenomics actually end up working out, right? So I'm going to come back over here to this Twitter thread. And I mean, because there's some good— there's some other good nuggets in there from, from Alexis. So he talks about how he's built and breathed community for 16 years. And I'm here right now like, Merry Christmas indeed. Also brilliant drop date, just not to be sentimental, but also so many people are avoiding their family or on their phones and no other news cycle, right? So now anyone can show up to a massively successful project and draft on their community. And if you offer something more interesting, rewarding, etc., overnight you can leapfrog your way into a very motivated minimum viable community overnight. So this goes back to kind of the, the implications behind social tokens, right? So, I mean, these are tokens and this is in this case, this is kind of a brand launching a token, right? But you do something like that and then you're going to be well ahead of The curve. So look at what ENS has done. Look at what SOS has done. And then drop in the comments below who else is doing this really well right now. Who else has done social tokens well? Who else has done airdrops really well? And drop it in the comment below. I'd like to see. And don't forget to hit the like and the subscribe button if you enjoyed this one. And we will catch you later.
