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The Operational Cost of Ethereum Airdrops

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Data Privacy Management, Cryptocurrencies and Blockchain Technology (DPM 2019, CBT 2019)

Part of the book series: Lecture Notes in Computer Science ((LNSC,volume 11737))

Abstract

Efficient transfers to many recipients present a host of issues on Ethereum. First, accounts are identified by long and incompressible constants. Second, these constants have to be stored and communicated for each payment. Third, the standard interface for token transfers does not support lists of recipients, adding repeated communication to the overhead. Since Ethereum charges resource usage, even small optimizations translate to cost savings. Airdrops, a popular marketing tool used to boost coin uptake, present a relevant example for the value of optimizing bulk transfers. Therefore, we review technical solutions for airdrops of Ethereum-based tokens, discuss features and prerequisites, and compare the operational costs by simulating 35 scenarios. We find that cost savings of factor two are possible, but require specific provisions in the smart contract implementing the token system. Pull-based approaches, which use on-chain interaction with the recipients, promise moderate savings for the distributor while imposing a disproportional cost on each recipient. Total costs are broadly linear in the number of recipients independent of the technical approach. We publish the code of the simulation framework for reproducibility, to support future airdrop decisions, and to benchmark innovative bulk payment solutions.

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Notes

  1. 1.

    https://bountyone.io/airdrops, [Online; accessed 18 Jun 2019].

  2. 2.

    This depends on the account type and state. For example, disabled contracts or contracts that are not programmed to transact with token systems will never be able to use the funds. This is also noted in [2].

  3. 3.

    See https://github.com/omisego/airdrop/blob/master/processor.py, line 77.

  4. 4.

    Functions: , , , .

  5. 5.

    Functions: .

  6. 6.

    Functions: , , , .

  7. 7.

    Events: and .

  8. 8.

    The first ERC-20 token. Block: 490 326, Address: 0xEff6425659825E22a3cb00d468E769f038166ae6.

  9. 9.

    Gas limit at the time of writing is 8 000 029 in block number 8 014 738.

  10. 10.

    This accounts to: one transaction per recipient, Merkle proof verification, and storage of withdrawal record.

  11. 11.

    The claim of constant distributor cost in the Coinstantine whitepaper indicates the use of pooled payments. See https://www.coinstantine.io/, [Online; accessed 22 Jun 2019].

  12. 12.

    https://gastoken.io/, [Online; accessed 21 Jun 2019].

  13. 13.

    https://arxiv.org/abs/1907.12383.

  14. 14.

    https://github.com/soad003/TheOperationalCostOfEthereumAirdrops.

  15. 15.

    This rests on the assumption that other computation cost can be optimized.

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Acknowledgments

We would like to thank Patrik Keller, Clemens Brunner and Alexandra Bertomeu-Gilles for their valuable insights and feedback.

This work has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No. 740558.

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Authors and Affiliations

  1. Department of Computer Science, Universität Innsbruck, Innsbruck, Austria

    Michael Fröwis & Rainer Böhme

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  1. Michael Fröwis
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  2. Rainer Böhme
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Correspondence to Michael Fröwis .

Editor information

Editors and Affiliations

  1. Universitat Oberta de Catalunya, Barcelona, Spain

    Cristina Pérez-Solà

  2. Universitat Autonoma de Barcelona, Bellaterra, Spain

    Guillermo Navarro-Arribas

  3. University of Luxembourg, Esch-sur-Alzette, Luxembourg

    Alex Biryukov

  4. Institut Mines-Télécom, Evry, France

    Joaquin Garcia-Alfaro

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Fröwis, M., Böhme, R. (2019). The Operational Cost of Ethereum Airdrops. In: Pérez-Solà, C., Navarro-Arribas, G., Biryukov, A., Garcia-Alfaro, J. (eds) Data Privacy Management, Cryptocurrencies and Blockchain Technology. DPM CBT 2019 2019. Lecture Notes in Computer Science(), vol 11737. Springer, Cham. https://doi.org/10.1007/978-3-030-31500-9_17

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  • DOI: https://doi.org/10.1007/978-3-030-31500-9_17

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-31499-6

  • Online ISBN: 978-3-030-31500-9

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