Study: almost 90% of tokens depreciate after airdrop

Keyrock analysts conducted a study of 62 airdrops Airdrop, Drop or Dropping is a free distribution of tokens to active users of a project. in 6 blockchain networks during 2024. And we can say that the conclusions will please only short-sellersTraders who will make money on the fall in the price of a digital asset.. As it follows from the publication:

• majority price of tokens distributed through airdrops drops during the first 15 days
• In 2024, 88% of tokens experienced a significant drop within a few months, despite a short-term rise in the beginning.

• Of the 62 airdrops analyzed, only 8 had positive returns after 90 days: 4 on Ethereum and 4 on Solana.

• Projects that distributed more than 10% of the total number of tokens performed better, while those that distributed less than 5% often faced massive sell-offs.

• The lack of liquidityThe ability to quickly convert an asset into cash without significantly losing its value caused the collapse of many tokens due to excessive sales pressure.
• Projects with excessively high FDVs Fully often faced a rapid price drop due to a lack of liquidity and no room for further growth (hey, Hamster Kombat!).

Best and worst airdrops of 2024

Let’s start with a success story.

Drift is a decentralized futures trading platform that has been running on Solana for almost three years. Drift has been the target of several hacker attacks. The team strategically allocated 12% of the total token supply to the airdrop — a relatively high percentage — and implemented a smart bonus system that activated every 6 hours after the initial allocation.

Starting with a modest market capitalization of $56 million, Drift surprised many, especially compared to other vAMMs (virtual automated market makers) that had fewer users and history but higher valuations. Drift’s market capitalization soon reached $163 million (a 2.9-fold increase since launch).

And now let’s move on to the most striking loser of the year.

ZkLend was positioned as a platform for lending and borrowing various assets based on the Starknet protocol. But now the value of $ZEND has fallen by 95%, and daily trading volumes barely exceed $400 thousand. This is a sharp contrast for a project that once had a market capitalization of $300 million.

So how did the project end up in such a sad situation? First, the concept of ZkLend was not particularly innovative: creating a pharma network where users could earn rewards through various protocols, and attracting liquidity and users through rewards and cross-chain activity.

However, it ended up with ZkLend being flooded with users focused solely on short-term rewards. Therefore, instead of creating a sustainable ecosystem, ZkLend found itself dependent on bounty hunters (dropshippers), which led to low customer retention. Because, logically, after receiving the reward, dropshippers quickly sold their tokens and left the project.

Source: Keyrock