Enjoy the Lightspeed newsletter on Blockworks.co today. Get news delivered straight to your inbox tomorrow. Subscribe to the Lightspeed Newsletter.
Hello!
Welcome back to the forty-fourth edition of Lightspeed, where we won’t be giving you tokens, but we will be giving you knowledge, ideas, and overall good vibes.
Oh, and your distribution is always 100%. Anyway:
Response to the Sanctum landing
Over the past few months, cryptocurrency — and Solana in particular — has seen a number of high-profile airdrops, with popular projects debuting their own tokens. These tokens are often distributed to users based on “points” awarded for using the protocol.
Following Jito’s JTO airdrop, which took place while the crypto bull market was still gaining momentum, the atmosphere was generally good, but recently the distributions have increasingly led to annoyance, “farming” for larger distributions, and articles on social media about the scourge of “low turnover, high FDV [fully diluted value] “tokens”.
Sanctum’s CLOUD distribution was supposed to be different.
Solana-based Liquid Staking focused its airdrop on “seriousness” — that is, rewarding long-term commitment to Sanctum’s success rather than self-serving airdrop farming. Sanctum co-founder FP Lee has spilled a lot of ink outlining the project’s thoughts and intentions on rewarding good behavior over bad. Half of the airdrop was to be distributed based on Sanctum points. The other half would be distributed based on seriousness, which the Sanctum team would measure based on a given user’s social contribution. This was done to combat the cryptocynicism that can arise when bad behavior goes unpunished.
And despite all this, some CLOUD recipients were outraged.
“Very disappointed,” wrote one. “I can’t believe how badly this team screwed up,” said another. Some began tracking down users who dumped their CLOUD after receiving it, and speculating whether those sellers were sincere recipients. Lee eventually posted a mea culpa on X.
When I reached Lee by phone after the airdrop, he said he thought the execution of the Sanctum airdrop — from incentivizing long-term plans by giving a better price to those who let their tokens be passed down to the lack of listing fees on exchanges — was “nearly perfect.”
However, Lee felt that Sanctum had fallen short in its attempt to reward diligence, as while the distribution scheme was intended to rally the project’s community around good behavior, it ended up causing some “resentment” among those who didn’t receive distributions, he said.
Sanctum isn’t alone in facing criticism for its new token distribution strategy: Connectivity platform LayerZero faced backlash after forcing users to donate to Ethereum development in order to receive their ZRO tokens.
The cliche of “recipients complaining that the long-awaited amount allocated to them for distribution is not large enough” is gradually turning into a melodrama.
I asked Lee if he thought cargo giveaways were still worth it.
He laughed and said, “I don’t know,” and then finally concluded, “I think it’s probably better to have some sort of honest sale rather than giving things away through the air, just because people have to back up their words with actions.”
However, as DL News laid out well yesterday, VCs are really into crypto projects with tokens that are generating revenue in a space where IPOs have been few and far between so far. Sanctum has raised over $6 million in VC funding to date. Lee told me that investors and founding teams “want TGE [token generation event].”
So, despite the obvious downsides to conducting a token airdrop, for VC-backed cryptocurrency founders it seems to be a “damned if you do, damned if you don’t” proposition.
— Jack the Cuban
Zero in
There has been a reshuffle at the top of Solana’s validator rankings:
Helius has overtaken Coinbase to become the second-largest validator by stake, accumulating nearly 13 million SOL in the network’s delegated staking system.
Part of the intrigue here is that, as Blockworks Research analyst Hayden Tsutsui noted, Coinbase’s place at the top of the list is due less to its market performance and more to the brand weight of a major exchange.
In a win for efficient markets, Helius offers stakers a higher APY than Coinbase, according to StakeWiz. However, Helius CEO Mert Mumtaz’s colorful online persona may have also helped things along.
– Jack Cuban
Pulse
ICYMI — Stories from Solana you may have missed this week:
- Claynosaurz won 14 awards at the Collision Awards, including gold in Character Design and Lighting in the Film and Marketing categories, beating out Pixar, Disney, Sony and others.
- Allium Labs has raised $16.5 million in Series A funding from Theory Ventures, bringing its blockchain-based data platform’s total funding to $21.5 million.
- A new Moonshot app has launched to make it easier to purchase Solana-based memecoins using Apple Pay, PayPal, and Google Pay, aiming to make cryptocurrency more accessible to newcomers.
- Cypherpunk Holdings has grown its Solana portfolio to over 63,000 tokens and will launch its own Solana validator, staking the majority of its tokens using its own node.
- SkyTrade has raised a seed round to create a marketplace where property owners and real estate companies can monetize and trade airspace rights, allowing them to monetize unused vertical space for drone operations and other purposes.
- Jambo has teamed up with Solana and Tether to offer blockchain-based financial services on its JamboPhone, aiming to empower the unbanked in Southeast Asia, Africa, and Latin America.
- Solana has formed a bullish pennant on its price chart, with some traders expecting higher prices. SOL has gained more than 21% in the last seven days, currently trading around $169.
– Jeffrey Albus
One good DM
Message from J, anonymous co-founder Sanctuary:
