Merkle Airdrop: the Basics

Although smart contracts have been around for quite a while, their concept still remains somewhat of a mindbender for the average user. This series of articles aims to shed some light on the purpose and working principles of the selected smart contracts supported by Smartz platform thus providing you with a simple explanation in relation to each of them. Today’s article is dedicated to the Merkle Airdrop, a smart contract used for the token distribution which many perceive as a better alternative for the traditional airdrops.

First things first: the term «traditional airdrops» refers to the widely used method of token distribution applied by the projects who try to promote themselves by intrusively sending out their tokens to thousands of addresses whose users are usually not even aware of the project’s existence. This method is considered as a spamming tactics: in most cases the amount of tokens sent to each address is so negligibly small that the users are not even capable of spending them since the commission rates applied by the exchanges are higher than the received sum. On top of it, users sometimes can’t even dispose of them — metaphorically these tokens can be compared to the throw outs off-loaded onto the community whose members are practically forced to store them on their wallets as a reminder of the project’s existence — till the end of time.

But the flaws of such airdrops expand beyond the pushiness with which the tokens are spread among the community. This method of token distribution has many shortcomings not only for the users, but also for the projects themselves. It costs them a lot — due to the growth of the network load, the fees for the transaction expand along with the number of addresses which receive tokens; moreover, the scripts that govern the distribution are usually unreliable and tend to crash, which means that the whole process has to be overseen by a software developer. In the end, everyone is unhappy with this stuff, which seems to be one of those take it or leave it type solutions for both users and projects. Well, at least it has been — until recently, before the introduction of Merkle Airdrop.

Based on the Merkle Tree (also referred to as hash tree), a solution widely applied in cryptography, this smart contract is centered around a fundamentally different concept: instead of sending tokens to every single address, the distributor simply specifies users who are allowed to receive tokens in the so-called whitelist — now it’s the user who has to «ask» for the transfer to happen, all required calculations being shifted on the user respectively. Simply put, the working principle can be described as following: the user has to prove that his address has been included into the list by carrying out relatively voluminous calculations on the client’s side and then pay the fee for the transfer (as discussed above, traditional airdrops require the distributor to pay the fees for each transfer himself). In a way, this allows distributors to kill two birds with one stone: instead of carpet-bombing unknown (and in most cases uninterested) accounts with tokens, they’re now able to share them with those who actually engage in the project, also cutting the costs on the fees.

Other advantages of Merkle Airdrop over the traditional kill-them-all method include an extremely simple deployment process along with higher reliability and safety (which again owe to the simplicity of smart contract itself); as opposed to the traditional airdrop, this one does not require the surveillance on the part of the programmer. As for the possible disadvantages, the first thing which comes to mind is that users have to do the calculations and put on their own, but this model is certainly more justified, and then again — as we’ve already discussed, decentralization is everything.

The deployment of a Merkle Airdrop on the Smartz platform is actually not that big of a deal even for a non-tech savvy person: if it is the first smart-contract you’re working with, you can use a simple step-by-step guide on how to deploy relatively similar smart contracts. You can also visit this page to learn more about the functions for Merkle Airdrop and the details of its deployment in general. The whole process can be best described as intuitive, since both mentioned guides are self-explanatory.

Also we prepared a simple video about deploying Merkle Airdrop on Smartz platform. More info on the supported smart contracts will follow.

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