After years of community badgering, a long-awaited token airdrop is now live.
Exchange aggregator ParaSwap today announced the launch of its PSP governance token. The token is currently available to claim for some 20,000 eligible Ethereum addresses, and enables users to stake in liquidity pools in exchange for platform rewards, as well as participate in its newly formed decentralized autonomous organization (DAO) governance.
ParaSwap famously resisted tokenizing for years, and as recently as last month the project’s official social media channels claimed the team was “not planning” an airdrop:
ParaSwap is not planning any airdrop
— ParaSwap (@paraswap) October 1, 2021
In an interview with CoinDesk, ParaSwap founder Mounir Benchemled said the timing of the airdrop was contingent on the development of the base platform.
“We decided to prioritize the product over the token, because our belief was that in order to have a token the reason had to be decentralization,” Benchemled said. “Let’s build a fantastic product, let’s reach a critical mass with users and volume, and then let’s move to tokenize and decentralize.”
One reason why ParaSwap may have played coy about an airdrop was the possibility of a Sybil attack, which airdrops traditionally have been vulnerable to.
A Sybil attack – named after a 1973 book about a girl named Sybil being treated for dissociative personality disorder – is one in which one account uses multiple fake addresses to gain disproportionate control.
Previous high-profile releases have been marred by controversy, such as Ribbon Finance’s RBN release, which was found to have been exploited via a Sybil attack by venture capital firm Divergence Ventures.
One ENS team member chimed in on Twitter, saying that the tokens represented “responsibility,” not “free money.”
you were not airdropped free money, you were airdropped responsibility
— brantly.eth (@BrantlyMillegan) November 9, 2021
Statistics show there was a reason for ParaSwap’s caution.
Per a data dashboard from the team, over 1.3 million addresses have interacted with the aggregator, with many of those addresses seemingly trying to game the distribution.
“The vast majority are farmers, and some of them are quite sophisticated. They use bots, sending tokens to thousands of wallets – sometimes tens of thousands of wallets – and they’re not real, active users,” Benchemled told CoinDesk.
As a result, the team has pared down eligible addresses to 20,000 that fulfill particular parameters – just .015% of all addresses that have interacted with the two-year-old protocol.
ParaSwap is releasing 21% of its tokens out of the gate: 7.5% will go to the airdrop and 6% will be allocated for the staking program, leaving 7.5% for the DAO to distribute as it sees fit – possibly in a liquidity mining scheme rewarding future users.
The remaining tokens are tied to a multiyear timelock schedule and reserved for the team, investors and future ecosystem development. ParaSwap raised a $2.7 million seed round in 2020 from a total of 32 investors.
Eligible users can now claim from the ParaSwap interface.