Liqwid’s Discord Airdrop Recap

Liqwid Finance
5 min readFeb 8, 2022


In everything we do Liqwid Labs aims to be as transparent as possible, and with the Discord Airdrop — DripDropz claim step now complete, we’d like to share our insights and lessons gleaned from the process.

The core team first met to discuss tokenomics updates with a focus on changes required to better fit the UTxO model. The list of changes included:

  1. Yield Farming and User Distribution combined into a single Community Distribution program
  2. A yearly halving schedule built into the token emission curve to incentivize early community members

An outcome of this call was deeper analysis on healthy token distribution and early governance participation levels.

The Yield Farming scheme as initially designed would only reward lenders staking qTokens in the yield farming contract, the core team felt this allocation should be utilized to incentivize borrowers and lenders equally. The community distribution does just this and we feel it’s the best way to ensure protocol incentives are fully aligned with the early goal to sufficiently bootstrap borrow demand (protocol revenue). Updating the LQ issuance curve to include a yearly halving was completed to generously incentivize early adopters while also retaining incentives for the future years.

The purpose of the airdrop was to distribute initial protocol ownership (1.5% of LQ token supply) to community members who will govern the protocol’s parameters and DAO Treasury via the Agora governance framework. Starting at mainnet launch, the protocol will be entirely governed by the community, without any foundation, the core developers, or other third-party intermediaries in charge.

The proposal to proceed with an airdrop was debated and voted on by core team members who collectively decided it was in the Liqwid ecosystem’s best interest. The last hurdle was identifying the most engaged group of Liqwid community members to compose the governance participants, this is where Discord entered the fold. The Liqwid Discord community members have been a suitable proxy for governance participants for over a year and we saw incredible community participation in the airdrop (e.g. 99.97% of eligible members have claimed LQ from DripDropz).

Now that we’ve unpacked the why, let’s talk about the how. Pulling off this airdrop was a two step process completed in a one month timespan.

The airdrop process started with the off-chain step required to connect Liqwid Discord members with their Cardano payment address. The sole criteria for qualifying for the airdrop was members had to be in the Discord before the time of announcement. The workflow to confirm eligible members involved a large data cleansing effort from Liqwid community moderators to remove duplicates and inaccurate submissions. This verification step was unfortunately manual and required as we observed examples of multiple submissions, and late submissions from members who joined the server shortly after the announcement. Verifying the 5000+ step 1 form responses while removing duplicates and errors was the most time consuming step of the entire airdrop. Community members had ten days to complete step 1.

We used Discord roles to tag members once we verified their submission for each step. This served as an additional verification step to ensure our internal data set matched 1:1 with the server database. We also used roles to notify community members they successfully completed that step and as a quick lookup tool during the quality control phase at the end of each step.

Recommendation to anyone planning a Discord Airdrop: ensure the API service or bot you plan to use for export and timestamping is operating according to the exact needs of your airdrop model. The step 1 verification process was made possible thanks to the timestamp functionality in the server’s welcome bot. The step 2 verification was expedited by leveraging a Discord API for exporting responses in a channel.

We also recommend setting up a channel for edge cases and helping members troubleshoot any issues they face completing airdrop steps. Tasking a community moderator with fielding questions in this channel helped expedite the quality control phase significantly.

The next step involved an on-chain verification step where each member who successfully completed step 1 received individual instructions to send 2 ADA plus a unique 6 digit code (i.e. randomly generated number) to their own payment address, which they entered in the step 1 form. We had serious concerns of unforseen attack vectors clever adversaries may use to undermine the airdrop process. To mitigate this risk, we decided to borrow a page of the SundaeSwap ISO SPO vote and to use the unique amount of ADA sent to indicate a precise action. In this case, sending a unique amount of ADA to yourself would signify “proof of ownership” for each Discord member, explicitly linking a Discord ID as the owner of a particular Cardano address. The API was used to pull the step 2 responses periodically (members were instructed to post the Tx ID hash and Cardanoscan link in a specified channel). Community members had two weeks to complete step 2.

Similar to step 1 closeout there was an exhaustive quality control phase at the end of step 2 which involved community moderators resolving individual cases posted in the help channels.

The final claim step was the most streamlined set of tasks thanks to the incredible DripDropz team of SPO’s and developers. The DripDropz platform is an ISO and Airdrop aggregator for distributing Cardano native assets. The platform is built on the Phyrhose transaction chaining and querying protocol which enables low level communication with cardano-node. Once the step 2 quality control phase completed we shared the final address set with the DripDropz developers for them to load up each wallet address with an equal LQ amount (193.25 LQ) and transferred 1.5% of token supply (from the 5% DAO Treasury allocation) to the payload address. Of the 1570 community members verified to claim LQ on starting on New Years (12am UTC on 1/1/22) less than 40 remaining members have yet to claim. This points to a 99.97% community participation in a little over 1 month’s time. If this is at all indicative of future governance participation in the Liqwid DAO we are in a great position as an ecosystem.

The support of the entire community was on display during the airdrop, on several occasions our core team was encouraged to see Discord members helping each other troubleshoot any problems that came up along the way. This community is strong and we can’t wait to see where you all take this ecosystem with the launch of governance.

We have a true second-mover advantage having observed some of the large scale governance and liquidity mining programs in the space, most notably Compound Finance and those that followed in the ‘DeFi Summer’ 2020 craze. In Liqwid’s case the hybrid airdrop and community distribution event work in tandem to preserve the fair launch ethos this protocol was built on.

Next Steps

Once the Agora governance system has completed security testing on our private testnet and is functioning reliably, we will open source this tooling for any distributed ecosystems in Cardano to leverage a general governance framework for proposal submission, voting and executing outcomes including delegated voting rights.

From the Liqwid core team, wagmi ❤



Liqwid Finance

Liqwid is an open source, algorithmic and non-custodial interest rate curve protocol built for lenders, borrowers and developers.