In recent years, it has become a standard operation for crypto projects to distribute airdrops on the eve of token issuance (TGE). Through the temptation of free tokens, project parties hope to accumulate enough hype and user attention before launching. However, the reality is often that the project "peaks upon launch", with hype and prices rapidly declining in a short time. Users often sell their airdrops immediately after receiving them, causing pressure on the token market, cooling community enthusiasm, and collapsing the user base that the project party has just built.
Although the traffic brought by airdrops is considerable in the short term, it is difficult to truly solidify into community assets or product users. Since most projects lack real commercial scenario support, after airdrops, they often have to rely on continuously issuing tokens to maintain user activity, which essentially overdraws future value. Ultimately, most of these tokens and user traffic flow into the arbitrage cycle of "wool parties", wasting the resources that truly support project development. The means originally designed to kickstart the ecology instead become a burden that undermines the project's vitality.
To break out of this vicious cycle, the conclusion is: projects must become "projects where wool can come from the pig". The benefits given to users must truly be borne by willing third parties. The phrase "wool comes from the pig" refers to platforms providing products or services for free to users, while other market entities pay for them. In the context of Web3, this means that project parties do not profit directly from the user side, but rather first provide benefits to users, with other stakeholders footing the bill, resulting in a three-way win: users benefit for free, projects expand their influence, and paying parties gain users, data, or brand exposure.
Implement the three-step method: build an ecological closed loop
If you are a project party, you might think: "I also want others to pay for my users, how should I do this?" I suggest thinking in three steps:
Identify core user groups: Please specifically define who the most important users of the project are at the current stage. Are they experienced traders mainly trading on your platform? Or everyday users of your product? Or investors holding your tokens? In other words, first answer "what kind of user behavior counts as success". Only by locking in the core user group that can truly bring results can subsequent strategies remain on target.
Explore unique competitive advantages: Analyze the project's moat and identify advantages that are not easily replicable by others. This could be cutting-edge technological strength (such as strong infrastructure), a large and active user community, unique data assets, etc. Ask yourself: "What unique skill do I have that other projects do not, but they really need?" Only by clarifying your core value can you confidently make others pay.
Find the paying "pig": Identify partners who need your resources the most and are willing to pay. For example, if an exchange or public chain project has strong liquidity, you can cooperate with new projects, where they use tokens or funds to buy opportunities to enter your platform; if you operate a DApp with a large number of active users, then other projects wanting users may be willing to pay to conduct airdrops or promotional activities through your channel. In short,whoever lacks your advantages is the one willing to pay "pig".
Through the above three steps, you can discover that "others provide resources to benefit your users" is not a fantasy, but a designable business model. In essence, you are using your core resources to help partners achieve their goals, and the partners invest to benefit your users, forming an ecological closed loop. This allows users to continuously enjoy dividends while strengthening your ecological stickiness.
Typical case: Binance's liquidity strategy
Taking the world's largest exchange Binance as an example, its core advantages are strong liquidity and a large user base. Binance's target users mainly include traders and BNB token holders. It proposes to new projects: willing to use tokens or funds in exchange for liquidity and exposure opportunities. Binance distributes new project tokens for free to users holding BNB or participating in mining through activities like Alpha airdrops. This method helps new projects quickly gain user attention and liquidity while bringing extra benefits to Binance's loyal users, thereby enhancing BNB holders' stickiness. Alpha airdrops target active users who participate in locking, trading, and providing liquidity, achieving a win-win situation of "users gain dividends, new projects gain exposure".
By the way, a common question is: "Why doesn’t Binance give airdrops to ordinary spot trading users?" The answer is that the trading volume on the main site is more provided by market makers (MM), who earn profits from liquidity. Binance needs to retain these core market makers, so it is more willing to give airdrop bonuses to more small and medium retail users, promoting new projects by expanding a broader user base. This practice aligns with the spirit of "wool comes from the pig": giving retail users free scratches, while the ones actually paying are the project parties that need liquidity and the market makers maintaining the market.
Another case worth noting is the social incentive platform Kaito. Its operational mechanism essentially uses user behavior data and content participation on social media (mainly Twitter) as "assets" to attract traffic, and then cooperates with other crypto project parties to distribute these projects' tokens as rewards to content contributors. Under this structure, users accumulate points or receive airdrops by "outputting attention and voice", while the ones really paying the incentive costs are those new project parties hoping to expand their influence through social volume before the TGE.
On the surface, this is a typical "wool comes from the pig" business model: users benefit for free, the Kaito platform meets demand, and the project party pays for the volume. However, this model has obvious structural risks in terms of sustainability. Its core dependency lies in whether Kaito has the ability to maintain long-term social attention. If in the future the project party has more efficient or cost-effective customer acquisition methods, Kaito's value as a "middleman" will significantly decrease.
Cooperation for mutual benefit: core value determines the ecological lifeline
Whether it's a tech-based project or a community-based project, the premise is to always maintain your core competitiveness. Once you lose the unique value that makes others willing to pay, this model will not work. The "wool" ultimately rests on the basis that the "pig" sees value and is willing to pay. If you find it difficult to position your strengths, you should consider adjusting your direction or focusing on the areas you are most skilled in.
For project parties, rather than blindly throwing money to drive up prices, it is better to think about what resources they have that can be exchanged with others. Find suitable partners and bring external forces into your own ecosystem. For example, your strong user community can bring traffic to other new projects, or your unique data resources can help projects make decisions. These are all values that others are willing to pay for with funds or tokens. Once successful, your users enjoy tangible benefits, you also strengthen ecological stickiness, and partners achieve their goals—everyone is happy.
Investor perspective: More emphasis on sustainable empowerment
Now that speculation in the crypto market has eased and investors are more rational, this reflects the maturity of the industry. As an industry observer, I believe that projects capable of long-term survival either have breakthroughs at the technical or product level (providing long-term value) or innovate in their business models (providing a healthy cycle). Projects that can combine both naturally have an advantage.
For investors, the next time you encounter a project boasting loudly, first ask if it has third-party blood-producing capabilities: Can the project truly allow "the pig to keep flying"? After all, only those cooperative models that can make "the pig trade every day, and the sheep never starve" can laugh last in this market.
The idea of "wool comes from the pig" is not just a slogan, but a viable strategy for guiding project operations. It requires the project party to clarify its own value, design an ecological subsidy mechanism, and work with partners to build growth together.
