Nick Chong · 1 day ago · 2 min read
Stellar unveiled its largest airdrop to date, worth over $120 million in XLM.
The Stellar Development Foundation (SDF) in partnership with Keybase, a free group messaging community and file transfer hub, announced that 2 billion XLM will be given away over the next 20 months. The airdrop will be directed to Keybase’s user base that accounts for over 300,000 accounts and will be divided in 100 million XLM per month distributions.
This incentive is expected to bring new users to the messaging platform and its continuation will depend on hitting “basic success metrics,” according to Cathy Corwin, a spokesperson from Inkhouse, Keybase’s PR agency.
“All you have to do is have an authenticated Keybase account, and your XLM will appear in your wallet–automatically, every month, for as long as the airdrop continues,” reads the announcement.
The airdrop not only represents an investment in a project that upholds the vision of the Foundation but it will also help to expand the adoption of XLM by getting it “into the hands of real people,” as stated by Denelle Dixon, CEO of Stellar Development Foundation. Dixon said:
“Our focus is global financial inclusion using blockchain and other technologies, focusing on the unbanked, and so from our standpoint, what this kind of thing does as an airdrop, is it actually brings more attention to the ability for technologies like this to be able to effectuate nicely, cleanly and efficiently, cross-border transactions to help the unbanked and others out there in the world.”
“Lumens into the world”
Under the mission to “unlock the world’s economic potential,” the Stellar Development Foundation was founded in 2014 as a non-profit organization. At the genesis block, the SDF created 100 billion XLM tokens. Now, the Foundation holds over 40 percent of the total XLM supply, which are meant to be “delivered into the world,” according to Denelle Dixon.
Throughout the years, the SDF has partnered with some of the most prominent companies in the cryptocurrency industry to give out free XLM in hopes that people will become more familiar with the technology and the Stellar network.
In November 2018, for instance, SDF in combination with Blockchain, the largest cryptocurrency wallet provider, airdropped $125 million worth of XLM to 30 million Blockchain customers. Earlier this year, SDF partnered with Coinbase to distribute up to 1 billion XLM through Coinbase’s Earn program, which allows users to earn cryptocurrencies while learning about them through instructional videos.
Airdrops are central to creating a more inclusive digital economy, stated Jed McCaleb, co-founder of Stellar Development Foundation. McCaleb added:
“Giving away lumens [XLM] for free is an invitation to communities to design the services they need. Our hope is to eventually have global citizens own and use lumens, in both developing and developed economies.”
In contrast to McCaleb’s stance on airdrops, there are also reputable critics of the practice.
Jameson Lopp, the CTO of Casa HODL was skeptical over whether airdrops can create lasting user engagement. He cites a 2014 study, where MIT students were given $100 in Bitcoin when BTC was less than $1,000 per coin, which found that adoption via giving away free BTC was inconclusive in stimulating adoption.
Stellar Lumens is also a victim of extreme levels of token holder centralization, suggested Larry Cermak, director of research at The Block. He pointed out that 89.6 percent of XLM supply is owned by the top 10 addresses.
Giving away free money is great for media coverage. Whether it’s effective at creating user adoption still seems up for debate.