ParaSwap and ENS Take Opposite Paths to Stop Airdrop Farmers

Governance tokens keep getting handed out, but the underlying tension hasn't gone away: most recipients want to cash out, not vote. With so few holders actually participating in governance, these distributions tend to function less like democratic tools and more like windfalls for small wallets and added leverage for whales. Projects face a narrow band to hit — hand out too much and the token craters, hand out too little and users complain, get the amount "right" and it's mainly whales who bother claiming it.

ParaSwap's strict filter

The long-anticipated PSP airdrop from DEX aggregator ParaSwap finally went live, built around eligibility rules that left little room for edge cases. Balancing reward for genuine usage against resistance to sybil farming always forces tradeoffs, and ParaSwap leaned toward exclusion over generosity.

To qualify, an address needed to meet all of the following:

1. At least 6 ParaSwap transactions across 6 months on eligible tokens (evidence of real platform use)
2. More than 50 transactions overall, or holdings above a set threshold of the network's native token (evidence of a generally active wallet)
3. If grouped in a cluster of more than 5 eligible addresses, a portfolio worth over $200 (an anti-sybil check)

The combined effect: only about 1.5% of addresses that had ever touched the platform qualified — roughly 20,000 "active users" out of 1.3 million unique addresses. ParaSwap's Shresth Agrawal noted that this same 20,000-address group accounts for around 80% of all volume on the platform.

Facing backlash from excluded users, ParaSwap laid out its reasoning in a Medium post, arguing for rewarding sustained use over raw volume: why should someone who shows up once before the snapshot to swap 1,000 ETH outrank a user who's been making modest 1–5 ETH swaps consistently for two-plus years? Claim progress can be tracked on a public dashboard, which showed just over half of PSP claimed as of this writing.

ENS takes a different route — manual policing

The ENS airdrop used simpler eligibility rules built around loyalty and consistent use of the service. That openness came with a cost: on-chain investigators quickly identified a sybil operation centered on one wallet, which had registered hundreds of domains in the preceding two weeks through subwallets, auto-renewed each for a decade via bot activity, and set a primary ENS record for every individual address involved.

ENS lead nick.eth walked the community through the team's response: rather than an automated filter, they manually blacklisted addresses judged "unambiguously" to be airdrop farming, ultimately identifying 1,371 such addresses with help from community tip-offs.

No clean solution exists

Whatever the approach, some legitimate users end up excluded — that appears unavoidable. It raises a harder question about the model itself: should protocol usage function as a prerequisite to earning a future reward, or should providing a useful service be enough on its own? For users who miss out on a given airdrop, there's little reason to stay loyal to a platform rather than move to a competitor still dangling a future distribution. As the space matures, projects will keep facing this same trade-off between rewarding their users fairly and defending against sybil abuse.