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1. Introduction
In the crypto space, there are countless activities people can engage in, such as investing in assets, buying tokens and NFTs, conducting research, developing decentralized applications, and participating in airdrop mining, among others. However, the common thread that ties all stakeholders in the crypto space together is trading. Nearly every user participates in trading, whether it's long or short positions on exchanges, asset exchanges in liquidity pools, or the exchange of non-fungible tokens (NFTs) in the NFT market. Interestingly, even illiquid assets primarily trade through peer-to-peer (P2P) processes in the crypto space.
Due to the lack of liquidity markets for illiquid assets, transactions for crypto tokens, airdrop allocations, whitelist projects, and more often take place in over-the-counter (OTC) markets. In such cases, individuals engage in dialogue and negotiate transactions with each other. However, there are significant challenges in the form of trust among participants. Trust is crucial because individuals must rely on specific users to possess designated assets and deliver those assets after the transaction. This poses the possibility of malicious activity, thereby introducing risks.
What if we could establish a trustless third party to facilitate secure transactions between parties, provide security, and prevent fraudulent activities? That's precisely the goal of Whales Market.
2. Airdrop 101
Most of us are familiar with airdrops, which involve sending free tokens to selected wallet addresses or users who meet specific criteria (such as completing certain activities within a specified time frame). But how did it all begin?
The first cryptocurrency airdrop occurred in March 2014 when Iceland launched Auroracoin. Every citizen received free tokens, with the initial 31.8 AUR increasing to 636. The purpose of these airdrops was to create a market for the tokens and raise awareness. However, it's worth noting that sending tokens required paying gas fees, which became expensive as gas prices and ETH prices rose.
Airdrops then evolved into free token claiming. Recipients could claim tokens for free but had to pay transaction gas fees. Compared to the value of the tokens, gas costs were usually small, so it was typically not an issue. However, as projects progressed, they realized that distributing tokens to random users who might sell the tokens was detrimental. Initially, early token releases allowed projects to gauge potential user interest and raise funds. However, after significant investments, it became evident that distributing tokens to random users had no benefits and could even harm the project.
In September 2020, Uniswap had a significant impact by airdropping UNI tokens to over 250,000 addresses. These addresses were eligible because they had interacted with the platform before September 1, 2020, and received at least $400 worth of UNI tokens. The UNI tokens from the airdrop provided voting rights (which is still their primary use), allowing users to vote on protocol changes and proposals.
This led to the emergence of a new user group known as airdrop farmers. They would conduct trades that didn't significantly contribute to the protocol's value but could rank them higher in airdrop rewards. For example, if the airdrop rules were based on the number of transactions from a wallet, they would create a large number of transactions by repeating the same amount, even if it incurred costs.
To counter airdrop mining, projects implemented more advanced strategies and mechanisms. The Optimism L2 platform introduced double airdrops, where users had to actively participate in the protocol's governance to qualify for the second round of airdrops, which began nine months later. The Blur NFT market adopted a multi-layered airdrop mechanism, seizing market share from OpenSea. They required users listing NFTs on other platforms to sell on Blur at lower or equivalent prices and leveraged certain protocol features, such as NFT series bidding. In the latest round of airdrops, users were even required to delist their NFTs from other markets to receive the most BLUR airdrops.
3. Token 101
Many projects are adopting a "token system," where users can earn tokens by contributing to the community. Founders are increasingly integrating off-chain token projects into their applications, such as:
- Rainbow Wallet using token rewards for Ethereum usage.
- Friend.tech building a sticky loop based on tokens.
- Blur introducing L2 Blast Points as incentives for fund bridging (TVL has exceeded $800 million since November).
This trend is part of a broader exploration of product-market compatibility within the crypto industry and a strategy to attract users during market downturns.
Users discuss the possibility of converting these accumulated tokens into project tokens, a trend observed in recent prominent airdrops.
4. Illiquid Crypto Trading Market
In the crypto space, there are many things not tradable on decentralized exchanges, such as whitelists, pre-TGE airdrop allocations, tokens, and NFTs traded peer-to-peer, among others.
Traditionally, these transactions have been conducted through community, private messaging, and centralized platforms. However, these methods often lack security measures, exposing traders to fraud risks, where scammers fail to deliver the promised tokens.
The main reason is that these transactions don't require commitments from the parties involved, as the transaction paths between them are isolated.
Although decentralized markets for these transactions have yet to emerge, such a market can increase liquidity, benefiting both buyers and sellers. To achieve this, a solution is needed to integrate a trustless system that prevents malicious behavior.
5. Whales Market Overview
Whales Market is a marketplace created to address the aforementioned issues, making transactions for illiquid assets more secure, trustless, and accessible to everyone.
Whales Market addresses this issue by integrating off-exchange trading on a unified platform. Here, buyers and sellers can engage in on-chain transactions agreed upon by both parties. Funds are securely protected in smart contracts and only disbursed to the relevant parties upon successful completion of the transaction. This functionality not only streamlines the transaction process but also significantly reduces potential economic losses from fraudulent activities.
Whales Market was developed by the same team that developed LootBot. The protocol was created in the summer of 2023 when Telegram Bots were popular. The concept was simple yet practical, as a Telegram bot aimed at simplifying most of the heavy tasks in airdrop mining.
Leveraging the success gained from LootBot, the team decided to create a more ambitious and complex product—Whales Market.
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Post time 8-4-2024 12:26:57