There is a desperate need for more experimentation with incentive design in this space JPEG Yakuza wrote a great article a while ago (that I admittingly bookmarked and proceeded to forget about) exploring an alternative that he called User-supplied Community Offerings (UCOs) Essentially this model lets airdrop recipients optionally sell their tokens directly to ICO-style buyers in a structured, conviction-rewarding way that lets the protocol avoid selling tokens itself and reduces Day-1 dumps. The key points: 1/ The traditional Airdrop structure broken in practice Most recipients sell immediately on Day 1 = they don’t create lasting community or conviction holders. The industry has become overly reliant on points systems and CT (Crypto Twitter) farming for discovery and reaching vanity KPIs. Airdrops then become a tool mainly to secure exchange listings rather than build genuine evangelists. Poor attribution/distribution = teams rarely analyze cross-protocol user behavior despite on-chain data being available. 2/ ICOs are also flawed in their current form Despite the common argument that: “An airdrop attracts people who want to sell your token, while an ICO attracts people who want to buy your token.” Most modern ICOs unlock 100% of tokens on Day 1 (if not it's not appealing or a "real/true" ICO) = buyers also immediately sell. Valuations at TGE are often aggressive compared to earlier private rounds and current market sentiment/organic demand. Large allocations + listing fees create massive sell pressure right at launch. They can actually reduce further buying pressure if the entry price leaves little upside. 3/ Core problem with both models Airdrops → recipients dump tokens. ICOs → buyers dump tokens. Both create a bad equilibrium where marginal buy pressure is quickly exhausted. 4/ Proposed solution: User-supplied Community Offerings (UCO) The protocol does not sell any tokens itself. Instead all supply for the raise comes from airdrop recipients who choose to sell. What does this looks like in practice? Airdrop recipients receive: 50% of their allocation in "Standard" or "Base" ERC-20 tokens. Remaining 50% are in the form of Non-transferable option tokens with a fixed strike price and expiry. Possible actions: Recipients can sell their Base tokens into the public raise (OTC-style). The more people sell, the cheaper the exercise price becomes for those who hold their options (via a multiplier that rewards conviction). Tokens only become transferable after price discovery and option exercise → eliminates post-TGE sell shocks. Optional foundation backstop liquidity to stabilize clearing price. Result: liquidity is recycled to believers instead of drained, and sell pressure is managed organically. 5/ Working example (simplified) 10% of total supply allocated to launch (4% airdrop + up to 6% user-supplied raise). Target FDV: $50M → strike price $0.05. Alice (low conviction) sells → gets cash and forfeits options. Bob (high conviction) holds → his remaining options get a multiplier (e.g., 1.5× cheaper "cost basis"). Charles (new buyer) buys from sellers like Alice at the clearing price. Everyone’s tokens stay non-transferable until the process ends. (Ex. Duration 7 days, Expiry is 30 days after the close) 6/ In summary Both airdrops and ICOs are just tools, and both are currently suboptimal. Regardless more experimentation clearly needs to be done with incentive design. UCO = a possible way to better align participants, reward conviction, control supply, and let price discovery happen between users rather than between the protocol and the market. Counterpoints - Actual execution details and complexities in practice, would this actually solve the “paper hands” problem.(Insightful)