PSYOP Airdrop: What Happened, and What's Next
Crypto airdrops are one of the easiest ways to get ahold of new crypto tokens. However, as simple as airdrops are, they don’t always go as planned.
Currently, there is some controversy surrounding the $PSYOP airdrop, which happened in May 2023. This airdrop has raised questions in terms of its authenticity and how the airdrop will affect people who invested in the token.
While the crypto community is following the PSYOP roll-out, we take a closer look at what cryptocurrency airdrops are and use PSYOP as a case study of what to look out for in future airdrops.
Understanding Cryptocurrency Airdrops
A cryptocurrency airdrop is a strategy crypto projects use to popularize their tokens by sending cryptocurrencies to current holders or interested parties for free or in exchange for performing a task.
This strategy has been seen as an effective way to increase a new cryptocurrency’s interest by increasing the number of people interested in holding the token.
There are several types of cryptocurrency airdrops, depending on how the project decides to conduct its airdrop.
Holder airdrops: In these types of airdrops, a project distributes a set number of tokens to their current token holders. They do this by either sending the tokens to everyone having their cryptocurrency in their crypto wallets or by sending the tokens to people having a specific amount of tokens. For instance, a crypto venture can say that they will only airdrop tokens to people having above 10,000 of their tokens in their wallets.
Bounty airdrops: A bounty airdrop involves a crypto project asking people who would like to hold their tokens to complete a specific task and, in turn, receive the cryptocurrency. Some tasks may include joining a community platform like a token’s Discord channel, retweeting a tweet, filling out a registration form, downloading an app, or filling out a survey. Once you meet the requirement, the project sends tokens to your wallet.
Standard airdrops: Anyone can receive cryptocurrency in a standard airdrop by simply expressing interest in participating in the drop. Here, the crypto project will include a mode of registration like filling in a form or sending in your wallet address and then send you the tokens.
Exclusive airdrops: Specific people are chosen by the crypto project to receive tokens during exclusive airdrops. These people would need to fit the criteria set out by the project. For instance, some of the people chosen could be active participants in the token’s community forums on Discord or Telegram or influential people in the crypto community.
Raffle airdrops: In raffle airdrops, the element of luck is the main determinant of if you will receive tokens. A cryptocurrency project would, in this case, ask their users or holders to earn a raffle ticket by reaching specific criteria like holding a number of coins. After the tickets are earned, the project then holds a raffle draw, and the people chosen receive tokens in their wallets.
The approach used by any cryptocurrency project to complete their airdrop will depend on what they want to fulfill. Regardless of whatever approach is used, you can always use Trust Wallet to claim your crypto airdrops.
The PSYOP Airdrop Case
The PYSOP airdrop is one of the more controversial airdrops we’ve witnessed in the crypto markets.
Initially, the $PSYOP meme coin project was launched in May 2023 by a popular NFT collector with the Twitter handle Ben.eth. Ben.eth had played a role in the success of trending meme coins like Pepe coin (PEPE), which he actively promoted. He has also launched a separate collaborative meme coin project known as $BEN with a popular YouTuber known as BitBoy. This launch was seen as a success, and he later handed the project over to BitBoy.
To capitalize on his popularity, Ben.eth launched the PSYOP project soon after the $BEN project, announcing it on Twitter and setting up a website. He also enlisted the support of other crypto enthusiasts to push for the project, which was to be executed in PSYOP-ETH liquidity pools.
Then, in a tweet, which was later deleted, Ben.eth asked people to send Ethereum (ETH) to his Ethereum address as a PSYOP pre-sale. This raised some questions in the crypto community as the move did not outline what safeguards were there to protect people against potential loss and did not give the launch date of the PSYOP smart contract.
In spite of the questions raised, people interested in PSYOP sent an estimated 3800 ETH, which converts to $7 million to the address.
To make matters worse, Ben.eth retweeted a phishing link sent by one of the influential personalities on Twitter, known as DJ Steve Aoki. This made his followers lose up to $170,000, which Ben promised to refund as Aoki’s account had been hacked.
When the token’s contract was finally launched on May 18, more users joined the project’s liquidity pool, staking their ETH to receive PSYOP. However, users also noticed that there was significantly less PSYOP in the pool than what was expected. At this point, people had started speaking out on the project, calling it a scam.
On the same day, Ben.eth appeared in a Twitter space discussion to speak on the project, where he was quoted as being cautious about the information he divulged and evading questions raised in the discussion.
Claims Against PSYOP
On May 19, an influential blockchain analyst called Lookonchain tweeted that users who had sent their ETH to Ben.eth during PSYOPs pre-sale had suffered significant losses. Some of the investors who had made a loss included veg.eth, who had sent 27 ETH to receive 14 million PSYOP tokens, which after the launch was only worth 3 ETH. Another person quoted was a user with the ETH address beginning with '0xac3', who sent 29 ETH tokens for 5.1 million PSYOP tokens and lost around 90% since their tokens ended up worth less than 3 ETH.
This revelation also came with possible legal implications.
Mike Kanovitz, a partner at a law firm called Loevy & Loevy threatened to file a lawsuit against Ben.eth. In a public statement released on Twitter by Mike, he stated that Ben.eth should send back all the ETH sent to him during the pre-sale or face a class action lawsuit filed by the law firm on behalf of people who purchased the token.
The statement further accused Ben of intentionally misleading and defrauding the buyers through serial promises and a manipulative launch strategy. He stated that Ben.eth had maliciously structured the PSYOP liquidity pools and trickled out the tokens. The lawsuit also seeks to reveal Ben’s co-conspirators and charge them with fraud.
Ben.eth, on the other hand, stated that only 10% of the PSYOP tokens had been released, and the rest would be released in upcoming stages.
Lessons Learned From the PSYOP Airdrop
While the PSYOP airdrop controversy is unfolding, with users being uncertain if the project was fraud or an early misjudgment, it’s important for you to learn what you need to look out for when interested in crypto airdrops.
Some of the things you should take into consideration include:
The project team: When you learn of an upcoming airdrop, it’s important to look at who is associated with the project. Usually, projects with only one team member or inexperienced members signal a possible scam or rug pull.
The project community: A lot of airdrops occur for existing blockchains. Here, the token has already established a solid community, which increases the chances of the success of its airdrop. Therefore, it’s important to research whether there is an existing and active community before you invest in the project.
A whitepaper: Most crypto projects have a whitepaper that outlines the team’s current and future plans. These documents highlight things like how the tokens will be used, the tokenomics, and even how the airdrops will be rolled out. Reading through the documents can help you determine if the project makes sense or is likely to be a scam.
Phishing links and emails: One of the easiest ways to scam people in an airdrop is through a malicious link or email. Here, you might be asked to share your wallet addresses and secret phrases to participate in the airdrop. The people who would have sent you the link may not be part of the project’s team and will steal your tokens. Always remember your secret phrase should never be shared with anyone.
How easy the airdrop is: Sometimes, an airdrop can sound too good. In this case, it’s important to take a step back and do more research on the project.
In the case of the PSYOP drop, there are several red flags we can identify from our list.
The first is that the project team was not shared, with Ben.eth being the only person known and driving the drop. Secondly, the project didn’t have a project document or whitepaper to outline how the token works, its utility, or why it was launched. Here, the only thing that explained the project was a 1-page website with scanty details.
Lastly, it was evident that most people did not carry out efficient research on the project and instead trusted the guidance and influence of Ben.eth and other people pushing for the project.
It’s very important to always do your own research (DYOR) before investing in any crypto project or airdrop, regardless of whether the PSYOP project is valid or not.
What's Next for PSYOP?
While PSYOP has the markings of a possible crypto airdrop scam, the outcome is still in limbo.
Currently, Ben.eth has publicly stated that only 10% of the tokens have been released and that there are plans in place to release the rest of the tokens. On the other hand, there is a pending lawsuit hanging over him and the rest of the undisclosed project team.
This fraud-related lawsuit could see Ben and his team being jailed and/or having to pay a hefty fine depending on how the evidence is presented in the Arizona district court, the jurisdiction in which they would be charged. In this instance, the investors would need to wait for the outcome of the lawsuit or could also act as witnesses in this case.
Please note that this does not count as legal advice. Instead, it may be beneficial to consult a qualified and registered legal practitioner for more advice on what steps to take if you had invested in the PSYOP airdrop or any other crypto airdrops that may have operated outside of rules and regulations.
The PSYOP airdrop has no doubt been a learning experience for people affected directly and for those watching on the sidelines. Either way, it’s important always to do your own research and carry out due diligence before participating in or investing in any project in the crypto space.