Airdrop Farming and Points Programmes
Airdrop farming is using protocols in the hope of qualifying for a future token distribution. Points programmes reward activity with points that may or may not convert into tokens later. Sybil farming — using many wallets to claim more — is commonly detected and excluded.
Many users now interact with new protocols purely hoping for a future airdrop. Sometimes it pays; often the costs, the selling pressure and anti-Sybil filters eat the reward.
- Category
- Cryptocurrency and Blockchain
- Reading time
- 3 min
- Also called
- Airdrop hunting, Points farming, Sybil farming
- Updated
Airdrop farming in plain words
Researchers describe airdrop farmers as users who optimise eligibility criteria to extract value without contributing much.1
Some airdrops need you to register to be eligible.2
Sybil attacks — one actor using many wallets — remain a pervasive threat.1
How farming works
Pick a protocol
Choose one without a token yet.
Learn criteria
Farmers target eligibility criteria.1
Track costs
Count fees and capital tied up.
Avoid Sybil behaviour
Farmers creating many wallets are a known target.1
Expect detection
Projects try to filter automated tools.1
Plan the exit
Up to 66% of tokens are sold quickly after claims.1
Worked examples
Example 1 — Costs vs reward
+$180A hypothetical farmer pays 40 transactions at $3 in fees and receives tokens worth $300.
| Costs | 40 × $3 = $120 |
| Net | $300 − $120 = $180 |
The result depends on meeting criteria the project sets.1
Example 2 — Sell pressure
+$30Tokens worth $300 drop 50% before you sell.
| Value | $300 × 0.5 = $150 |
| Net | $150 − $120 = $30 |
Rapid selling by recipients can push prices down.1
Example 3 — Sybil flagged
−$1,200A farmer uses 10 wallets at $120 each and all are excluded.
| Costs | 10 × $120 = $1,200 |
| Reward | $0 |
Multi-wallet farming is a known Sybil threat projects try to filter.1
Airdrop farming vs genuine use
| Aspect | Farming | Genuine use |
|---|---|---|
| Goal | Qualify for tokens | Use the product |
| Wallets | Often many | Usually one |
| Exclusion risk | High if Sybil | Low |
| After claim | Often sells fast | May keep using |
Where it shows up
Points programmes
Activity rewards with uncertain value.
New chains
Layer-2 networks before a token.
Risk budgeting
Treat costs like Risk per Trade.
Post-claim trading
Watch Liquidity and Volatility after launch.
Advantages and disadvantages
Advantages
- Potential reward for early activity.
- Learn new protocols.
- Low cost for single-wallet users.
Disadvantages
- Rewards uncertain; points may never convert.
- Fees and time add up.
- Sybil filters can exclude you.
- Fast selling hits prices.
Going deeper
Read as far as you need. Each level builds on the one before it.
Common mistakes
Ignoring fees
Costs exceed rewards.
Using many wallets
Risk of exclusion and breaking terms.
Treating points as money
They may never convert.
Holding blindly
Fast post-claim selling.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Farming targets future airdrops.
- Points may not convert.
- Sybil farming is detected and excluded.
- Fees can wipe out rewards.
- Tax rules differ by country.
Frequently asked questions
Are points the same as tokens?
Is multi-wallet farming allowed?
Are farmed tokens taxed?
Further learning
- Expectancy
Is it worth it on average?
- Trading Fees and Commissions
Cost drag.
- Liquidity
Selling after claim.
- Capital Gains Tax
Tax on gains.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- Messias, Yaish & Livshits (arXiv). Airdrops: Giving Money Away Is Harder Than It Seems (opens in a new tab) Checked .
- HMRC (GOV.UK). CRYPTO21250 - Cryptoassets for individuals: Income Tax: airdrops (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.