Report: Are Crypto Airdrops Dead?

Crypto airdrops are facing growing challenges in 2024, with high unclaimed values, a decline in token value post-airdrop, and increasing user dissatisfaction, AirdropBee, a discovery platform for airdrop hunters, reported.

What’s the significance:  Airdrops, once a key strategy for crypto projects, are facing growing scrutiny due to increasing speculative behavior, market instability, and declining interest, raising doubts about their future effectiveness in user acquisition and project sustainability.

Key Details: AidropBee found ‌that while airdrops drive short-term user engagement and total value locked (TVL) growth, they often lead to high token dumping rates and declining long-term value.

• The study highlighted a record $20.6 billion in airdrop value in 2024 but also noted challenges like $45 billion in unclaimed rewards.
• There is also a declining average airdrop value per project, prompting calls for more sustainable airdrop strategies.

The Numbers: 

• 88% of crypto projects in 2024 used airdrops.
• 199 million participants were attracted.
  • Around 45% higher compared to 135.8 million airdrop hunters in 2022.
• 64% of recipients sold tokens immediately at the token generation event (TGE).
• 66% of projects saw token price declines post-airdrop.
  • Losses ranged from 23% within the first week to 82% over six months.

Other Findings:

• Annual Growth: Airdrop value has grown significantly, from $189.7M in 2018 to $12.64B during the 2021 bull run, peaking at $20.60 billion in 2024. 
• Decline in Average Airdrop Value: For 2024, the average airdrop value per project dropped to $309.8 million, the lowest in three years.
  • The decline is attributed to the high number of new projects, diluting individual project values.
• Unclaimed Airdrops: About $45 million worth of rewards went unclaimed on average in 2024.
  • Smaller rewards and increased claiming effort contributed to reduced interest among users.
  • As airdrop rewards shrink, users are less incentivized to claim, highlighting the need for more engaging strategies to maintain participation.
• Declining Per-Project Value: Despite record overall figures, the average airdrop value per project fell to $309.8 million in 2024, due to a surge in the number of projects, which diluted individual value. 

Challenges:

• Negative Sentiment: 33% of tweets analyzed showed skepticism, indicating fatigue with airdrops.
• High Unclaim Rates: Nearly 20% of eligible recipients did not claim their airdrops due to factors like lack of awareness, disinterest, or market saturation.
• Token Dumping: More than half of recipients sell their tokens right after the TGE, leading to market instability and reducing the long-term value of the airdrop.

How It Works: In getting these results, AirdropBee analyzed 1,528 crypto projects to evaluate the effectiveness of airdrops from 2018 to 2024, utilizing data from CryptoRank, ICODrops, and internal sources. 

• Using Dune Analytics, researchers gathered information on airdrop recipients and token quantities, calculating the total airdrop value by multiplying token amounts by their all-time high prices on CoinGecko.
• They also examined metrics like TVL, token price performance, and unclaimed rewards.

Between the Lines: While airdrops generate short-term hype, they often fail to sustain token value without strong community engagement.

• However: Despite market skepticism, airdrops significantly drive TVL growth for many projects, showing potential for long-term value creation when integrated with strategic incentives.

Key Quote:

“Airdrops remain a powerful tool for user acquisition, with record-breaking numbers in 2024. However, as popularity grows, so do the challenges, such as shifting sentiment, unclaimed airdrops, and token dumping. While airdrops can generate short-term interest, projects must adopt sustainable strategies to address these issues and drive long-term value. As the crypto market evolves, so too must the approach to airdrops in order to provide lasting value.”

AirdropBee

Worth Reading: In the Philippines, the local community of airdrop hunters, Airdrop ng mga Bobo, launched their Telegram bot to educate newcomers and celebrate the community’s growth through presentations, giveaways, and networking.

This article is published on BitPinas: Report: Are Crypto Airdrops Dead?

What else is happening in Crypto Philippines and beyond?