Beyond Airdrops: Smarter Ways to Drive Initial Wallet Activity

In Web3, the race to acquire users is fierce—and too many projects rely on outdated tools like airdrops to spark early wallet engagement. While airdrops can provide a temporary boost, they're often plagued by sybil attacks, mercenary users, and short-lived participation. So, what's the smarter, more sustainable alternative in 2025? This blog explores robust and creative approaches that go far beyond free tokens.

1. The Problem with Airdrops Today

Airdrops have been the default user acquisition strategy in Web3 for years. The concept is simple: distribute tokens freely to wallets and hope some of them convert into loyal users. Initially, it worked—projects like Uniswap, dYdX, and ENS used airdrops to reward early adopters and build momentum.

However, as the Web3 space evolved, airdrops became targets for a new type of user: the mercenary. These users create dozens or hundreds of wallets, follow the bare minimum eligibility criteria, and immediately dump the tokens upon receipt. They don’t care about the product or ecosystem—they’re just here for the free money.

This has led to massive inefficiencies:

• Token dumps that crash market value
• Fake traction metrics (wallets ≠ users)
• Disillusioned communities who missed the drop or watched value evaporate

The result? Airdrops alone are no longer viable for sustainable wallet activity. Web3 projects must look for ways to turn wallets into real users from the very beginning.

2. Defining Quality Wallet Activity

Before redesigning onboarding strategies, we need to clarify what good wallet activity looks like. A connected wallet doesn’t mean anything unless there’s engagement and intent behind it.

Quality wallet activity includes:

• Completing multiple on-chain interactions (staking, swapping, claiming rewards, voting)
• Holding tokens or NFTs over time instead of dumping
• Participating in governance (voting, proposals, forum discussions)
• Contributing content or feedback to the project
• Referring new users who become active participants

Instead of counting new wallet connections as success, define activation milestones based on actions that reflect understanding, commitment, and repeat engagement.

3. Rethinking First Impressions in Web3

First impressions matter, especially when onboarding users into decentralized systems that are often complex and unfamiliar. Most users encounter a project via a Twitter post, token mention, or airdrop tracker. From there, they face hurdles:

• Unfamiliar wallets
• Gas fees
• Unintuitive interfaces
• Unclear value propositions

A smart onboarding journey should break down these barriers:

• Use zero-cost actions to demonstrate value (e.g., claiming a badge NFT)
• Walk users through the UI with tooltips and mission prompts
• Allow wallet simulations or testnets before real value is staked
• Offer story-based intros (think: interactive tutorials with lore)

The key is to give the user a reason to stay before asking them to invest anything. Emotional and cognitive investment needs to happen before financial investment.

4. Quests as Educational Onboarding

Web3 onboarding needs to be active, not passive. That’s where quests come in.

A quest-based model flips onboarding into an interactive learning experience:

• Step 1: Connect wallet and claim welcome badge
• Step 2: Stake tokens in a pool and view results
• Step 3: Submit feedback to improve the protocol
• Step 4: Vote in a test proposal and learn how DAO governance works

These quests don’t just teach—they filter. Users who complete multiple steps are more likely to understand and care about the project. Even better, quests can be shared publicly, creating viral discovery loops.

Platforms like Galxe, Layer3, Zealy, and QuestN make quest deployment simple and scalable.

5. Soulbound NFTs and Early Proof-of-Work

Soulbound Tokens (SBTs) represent non-transferable on-chain achievements. They’re ideal for early user filtering:

• Issue SBTs for completing onboarding quests
• Use them to unlock Discord roles, protocol tiers, or whitelist spots
• Build reputation layers based on the number and depth of SBTs held

SBTs serve two major purposes:

1. Preventing sybil behavior: They can’t be transferred or sold.
2. Creating identity: They signal participation and value alignment.

You can also combine SBTs with time locks, cooldowns, and contribution scores to build a trustworthy early community.

6. Gamified UX and Experience-Driven Interactions

User experience is still the most underutilized retention tool in Web3.

Turn every interaction into a mini-game:

• Connect wallet → Earn a puzzle piece NFT
• Stake tokens → Trigger a sound/animation reward
• Invite a friend → Unlock a shared reward or secret mission

The goal is not just to make onboarding easy, but to make it fun. Most Web3 users are tinkerers and explorers—tap into that by layering quests, storytelling, and surprise mechanics into your UX.

Tools like Noox, HyperPlay, and even Discord-based bots allow creative implementation.

7. Progressive Unlocks: From Wallet Ping to Deep Protocol Use

Not every user is ready to go from zero to DAO contributor in a week. Build an activation ladder:

• Level 1: Wallet connection and badge claim
• Level 2: Stake tokens or swap on testnet
• Level 3: Join Discord, fill onboarding survey
• Level 4: Vote on governance test proposal
• Level 5: Share content, invite others, contribute ideas

Each unlock should feel meaningful. Add XP, roles, and NFTs as proof of progress. Use Discord bots, NFTs, and platform integrations to tie it all together.

8. Collaborations & Cross-Project Boosting

Most users today already have some exposure to other projects. Use that!

Cross-project campaigns help you:

• Leverage the trust and audience of existing protocols
• Validate user history by checking past wallet actions
• Offer rewards only to wallets that interacted with partner projects

Example: A DeFi protocol can offer bonuses to wallets that previously interacted with Lido, Aave, or Yearn.

This reduces the cost of discovery and increases the chances that a wallet will be genuinely interested in what you’re building.

9. Wallet-Based Identity Building

Every Web3 wallet tells a story. With the right tools, you can turn wallets into personalities:

• Display badges, XP, roles, SBTs
• Let users choose profile avatars or backgrounds
• Enable wallet-based social handles (via ENS, Lens, or Farcaster)
• Create custom feeds based on wallet behavior

When users can see their own growth and status, they’re more likely to stick around. Platforms like DeBank, Lenster, and ENS are already paving the way.

10. Metrics That Actually Reflect Activation

Don’t fall for vanity metrics like wallet connections or social follows. Instead, track:

• Number of quests completed within 7 days
• Wallets with >3 protocol actions
• Participation in Discord or governance polls
• Time between first and second interaction
• Referrals that convert to action-takers

Use analytics platforms like Dune, Nansen, Flipside, and Footprint Analytics to create live dashboards.

6. Gamified UX and Experience-Driven Interactions

User experience is still the most underutilized retention tool in Web3.

Turn every interaction into a mini-game:

• Connect wallet → Earn a puzzle piece NFT
• Stake tokens → Trigger a sound/animation reward
• Invite a friend → Unlock a shared reward or secret mission

The goal is not just to make onboarding easy, but to make it fun. Most Web3 users are tinkerers and explorers—tap into that by layering quests, storytelling, and surprise mechanics into your UX.

Tools like Noox, HyperPlay, and even Discord-based bots allow creative implementation.

7. Progressive Unlocks: From Wallet Ping to Deep Protocol Use

Not every user is ready to go from zero to DAO contributor in a week. Build an activation ladder:

• Level 1: Wallet connection and badge claim
• Level 2: Stake tokens or swap on testnet
• Level 3: Join Discord, fill onboarding survey
• Level 4: Vote on governance test proposal
• Level 5: Share content, invite others, contribute ideas

Each unlock should feel meaningful. Add XP, roles, and NFTs as proof of progress. Use Discord bots, NFTs, and platform integrations to tie it all together.

8. Collaborations & Cross-Project Boosting

Most users today already have some exposure to other projects. Use that!

Cross-project campaigns help you:

• Leverage the trust and audience of existing protocols
• Validate user history by checking past wallet actions
• Offer rewards only to wallets that interacted with partner projects

Example: A DeFi protocol can offer bonuses to wallets that previously interacted with Lido, Aave, or Yearn.

This reduces the cost of discovery and increases the chances that a wallet will be genuinely interested in what you’re building.

9. Wallet-Based Identity Building

Every Web3 wallet tells a story. With the right tools, you can turn wallets into personalities:

• Display badges, XP, roles, SBTs
• Let users choose profile avatars or backgrounds
• Enable wallet-based social handles (via ENS, Lens, or Farcaster)
• Create custom feeds based on wallet behavior

When users can see their own growth and status, they’re more likely to stick around. Platforms like DeBank, Lenster, and ENS are already paving the way.

10. Metrics That Actually Reflect Activation

Don’t fall for vanity metrics like wallet connections or social follows. Instead, track:

• Number of quests completed within 7 days
• Wallets with >3 protocol actions
• Participation in Discord or governance polls
• Time between first and second interaction
• Referrals that convert to action-takers

Use analytics platforms like Dune, Nansen, Flipside, and Footprint Analytics to create live dashboards.

11. Tools and Platforms to Use

12. Examples of Projects Getting It Right

• Lens Protocol: Focused on social graph interactions instead of speculative tokens.
• Gitcoin: Created proof-of-work mechanisms via grants and quests.
• Zapper: Used gamification and cross-chain visibility to engage users.
• Bankless Academy: Created structured learning and XP paths.
• Optimism: Used mission-based participation as pre-conditions for rewards.

These projects focused on interaction over incentives—and it paid off.

13. Mistakes to Avoid

• Launching an airdrop before user education
• Ignoring wallet data and relying on hype
• Setting KPIs on wallet count instead of engagement
• Making onboarding too short or too difficult
• Failing to build follow-up systems

Avoid these to maximize the value of every wallet that touches your dApp.

14. FAQs

Q1: Should I stop doing airdrops completely?

No, but you should shift how you use them. Airdrops can still be a valuable tool when paired with meaningful engagement mechanisms like progressive quests, proof-of-work tasks, and sybil resistance methods. For example, combining an airdrop with identity-verified wallets or those who’ve completed loyalty-based milestones ensures your tokens reach users who are more likely to stay. Think of airdrops not as a giveaway, but as a recognition tool for effort and alignment.

Q2: How do I prevent bot signups in quests?

You can integrate multiple layers of sybil resistance and identity verification. Use tools like zk-credentials to anonymously verify human uniqueness, Discord and Telegram account verifications, CAPTCHA challenges, and historical on-chain activity to weed out fake wallets. Additionally, reward systems can penalize suspicious behavior (like rapid quest completion or low token retention) while highlighting loyal users who show consistent engagement.

Q3: Can I reward users without spending tokens?

Absolutely. Token rewards are not the only motivator. Consider offering NFT-based access, gated Discord channels, reputation points, early feature access, governance voting power, and recognition through badges or roles. Some projects use achievement-based systems, where users unlock perks based on their contribution level. These methods can create stickier engagement and community identity without draining your token treasury.

Q4: What’s the best way to onboard non-crypto users?

Non-crypto users need simplicity and guidance. Use social logins (via Web3Auth or Magic.link), minimize wallet setup friction with embedded wallets, and provide a step-by-step onboarding tutorial using testnets or simulations. Gasless transactions (via meta-transactions or relayers) also help remove technical hurdles. Ultimately, making your dApp feel like a Web2 app with Web3 value under the hood is key to onboarding the mainstream.

Q5: What chains support this kind of onboarding?

Most EVM-compatible chains like Ethereum, Polygon, Arbitrum, Optimism, and Avalanche support wallet-native tools. Solana also offers integrations for onboarding and retargeting. Choose a chain that supports low-cost interactions, broad wallet support (like Phantom, MetaMask, Rabby), and integrations with engagement layers like Notifi, XMTP, and Galxe.

Q6: What retention rates are realistic for a Web3 project?

Retention depends heavily on onboarding quality, value proposition, and follow-up. For short-term (Day 7) retention, expect around 30–50% if quests and activation steps are clear. Long-term loyalty (Day 30+) may fall below 20% unless the user is emotionally and economically tied to the ecosystem. Projects that offer ongoing challenges, governance roles, and community incentives tend to retain better.

Q7: How do I retarget wallets natively without email or Web2 tools?

Use wallet-native channels like XMTP (on-chain messaging), Notifi (cross-chain push notifications), or POAP reminders. You can also target wallets that hold your token or NFT via smart contract logic to airdrop updates or quests. NFT-gated announcements and unlockable content are another form of retargeting that respects user sovereignty while maintaining relevance.

Q8: What role do communities play in wallet activation and loyalty?

Communities are foundational to long-term engagement. While tech and incentives attract users, belonging keeps them. DAO-based recognition systems, Discord/Telegram engagement roles, content creation incentives, and collaborative quests can all deepen ties. When users identify as part of something greater, they’re more likely to invest time, stake value, and advocate for the project.