11.26.2024

Understanding The WalletConnect Token Airdrop: A Dive into the Scoring System

In the evolving landscape of web3, designing a fair and effective token distribution mechanism is crucial. WalletConnect's approach to their token airdrop showcases a sophisticated scoring system that identifies and invites genuine network participants to become among the first members of the community, while protecting against potential exploitation.

The below outlines how scoring was determined for users and GitHub contributors for season 1 of the WalletConnect Airdrop.

Eligibility and Profiles

Assessing eligibility for the airdrop begins with user profiles created through airdrop.walletconnect.network. To qualify, users needed to authenticate with at least one wallet using the WalletConnect Network, create a profile and demonstrate activity through connections or signatures before September 12, 2024. This initial filter ensures basic engagement with the ecosystem and prioritization of rewarding true power users of the WalletConnect Network.

The Three-Pillar Scoring System

WalletConnect's scoring mechanism rests on three pillars:

1. Network Activity

The first pillar evaluates user interactions within the WalletConnect Network. The network effect function f(Nd) acts as a multiplier, considering the ratio of user's signatures and connections against the total network activity. The method was designed so that consistent network participants receive a proportional allocation.

2. Onchain Presence

The second pillar examines activity across ten major blockchain networks, including Ethereum, BNB Smart Chain, Polygon, Avalanche, Arbitrum, Base, Linea, Optimism, zkSync Era and Blast. Key metrics include:

• Wallet balances
• Transaction volumes over the last three months
• Accumulated gas fees
• NFT minting activity

For this analysis scoring system takes into consideration only the period from June 12 2024, to September 12 2024. Non EVM chains were not scored in this airdrop, but may be considered in scoring during future seasons.

3. Airdrop Behavior

The third pillar analyzes how users handled previous airdrops, introducing a weighting system:

• Long-term holders can receive up to a 5% bonus
• Quick sellers may face up to an 80% reduction
• The system weighs both retention rates and holding duration

Understanding the Scoring Calculation

The scoring system combines multiple factors into a comprehensive evaluation using this formula:

Score(i)= f(Nd)* Wwc(CCi + SSi) + Woc(BBi + GGi + VUVUi + MM) + wAAi - Bfi

Network Activity Component

• f(Nd): Network effect multiplier based on user's activity ratio
• Wwc: Weight factor balancing WalletConnect vs onchain activity
• CCi: Connections made through the network
• SSi: Signatures performed

Onchain Activity Component

• Woc: Weight factor for onchain activities
• BBi: USD value of wallet balances
• GGi: Total gas fees spent (in USD)
• VUVUi: Transaction volume in last 3 months (in USD)
• MM: Number of NFT mints

Behavior Component

• wAAi: Airdrop behavior score
  • +5% maximum bonus for long-term holders
  • Up to -80% discount for quick sellers
• Bfi: Bot factor penalty based on transaction patterns

The system automatically balances WalletConnect (Wwc) and onchain (Woc) weights to normalize differences in activity levels across platforms. This ensures neither platform dominates the scoring unfairly.

Protection Against Sybil and Bots

To maintain integrity of the community, WalletConnect has implemented robust protection mechanisms:

1. Bot Detection: A sophisticated heuristic system analyzes transaction patterns to identify automated behavior, applying penalties to suspected bot activities without outright exclusion to avoid false positives.
2. Sybil Resistance: Partnership with OpenBlocksLab provides advanced Sybil detection, identifying and filtering out duplicate or fraudulent profiles.
3. Risk Assessment: Comprehensive screening protocols ensure compliance and ecosystem security.
4. Sanctions Screening: All profiles are screened against OFAC SDN sanctions list, and eligible profiles were also screened for interactions with sanctioned or other serious crime-related accounts or activities.

Additional Allocations

WalletConnect's distribution model goes beyond just network activity, incorporating:

• Github contributions: Recognizing technical contributors to the ecosystem
• Gitcoin donations: Acknowledging community support through alternative channels

These additional allocations stack with the base scoring, creating a comprehensive reward system that acknowledges various forms of ecosystem participation.

The Final Outcome

The final allocation combines all these elements: Final Allocation = Network Activity Allocation + Github Allocation + Gitcoin Allocation

This formula ensures that users contributing through multiple channels receive proportional recognition, while the sophisticated scoring system maintains fairness and rewards genuine participation.

The standard is set.

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