原标题：《Airdrop token prices are crashing — Does Web3 need a new model?》
By Alex O’Donnell
Compiled by: BitpushNews an
Airdrops — tokens distributed free of charge to users — have dominated the cryptocurrency market over the past year.
Now that airdrops are falling out of favor due to underperforming tokens and a mercenary user base, Web3 protocols are beginning to wonder if it’s time for a new model.
Since 2023, airdrops have been everywhere. Seemingly, every protocol that has emerged in Web3 has conducted an airdrop, from Arbitrum and Optimism to Celestia and EigenLayer. In total, over 30 major projects have conducted token airdrops in the past 18 months.
This surge in activity is partly an overcompensation for the “crypto winter” of 2022, when a sharp market downturn forced many Web3 projects to postpone planned token listings.
“All these projects that were in the backlog from 2021, 2022 are now finally starting up in the 2024 cycle,” said Tom Dunleavy, managing partner at crypto investment firm MV Global.
Airdrops entice crypto-native investors with the lure of essentially free money, and high-profile airdrops attract huge hype. At the peak of the frenzy this year, even rumored airdrops were enough to draw billions of dollars into some projects.
But there’s a problem: airdrops are rarely successful. Token prices generally plummet after an airdrop, and the benefits to the protocol are usually short-lived.
Have airdrops reached their limit?
The industry has begun to realize this. For the first time this year, interest in airdrops has waned and protocols have begun to consider alternative methods of launching tokens.
“I think we’ve reached peak airdrops,” said Jonathan Joseph, co-founder of SmartFunds, a platform for tokenizing real-world assets. “We need constructive models for bringing liquidity to new protocols in a way that increases returns for all stakeholders involved.”
According to Aylo, a cryptocurrency researcher and pseudonymous founder of Alpha Please, 23 of the 31 tokens distributed in massive airdrops have lost value since their initial listing, sometimes severely. Excluding memecoins, only two airdropped tokens (roughly 6% of the total) have outperformed Bitcoin.
“Selling the airdrop into USD or BTC on launch day is almost always the right choice,” Aylo wrote in an X post.
Adding to holder frustration is the fact that the opaque over-the-counter points system used to distribute the airdropped tokens may be inherently controversial.
“When the airdrop came, people felt cheated because the number of points didn’t necessarily correlate to the number of tokens they received,” Joseph told Cointelegraph.
Protocols are also experiencing disappointment. Airdrops are an extremely expensive way to onboard users — often consuming 10% or more of a protocol’s total token supply — and they don’t always work.
The ongoing airdrop craze has spawned a small industry of airdrop farmers who jump from one protocol to another in search of free tokens. Airdrop farmers often sell the tokens immediately after an airdrop, sending the price into a self-sustaining downward spiral.
“Many of these tokens have very low circulation, with less than 10% of supply at launch, so they are more volatile,” Dunleavy told Cointelegraph.
After completing an airdrop, projects typically experience a loss of users and total value locked (TVL, a measure of on-chain liquidity).
According to L2Beat data, almost all second-layer protocols that have conducted airdrops since the beginning of 2023 have seen net TVL outflows in the following weeks. One of the second-layer protocols, Blast, which distributed about a quarter of its total token supply, lost about 25% of its TVL in the first nine days after the airdrop.
“In the case of an airdrop, especially if the points system stops, you might see a reset of supply and demand among users,” said Ken Deeter, a partner at Electric Capital, a cryptocurrency venture capital fund.
The impact of regulatory pressure on airdrops
Some airdrops have been complicated by regulatory pressure. EigenLayer, an Ethereum restaking protocol, sparked considerable controversy by banning participants from more than a dozen countries, including the United States, Russia, and China, from its high-profile EIGEN airdrop. It also prohibited recipients from transferring tokens for at least a year.
Airdrops emerged in part as a response to the initial coin offering (ICO) craze of 2017, which sparked a crackdown from regulators who deemed ICOs illegal securities offerings. To avoid a similar fate, airdrops tend to avoid any mention of investment returns or value accumulation.
“It’s such a twisted system,” said Cosmo Jiang, a partner at Pantera Capital, a venture capital fund focused on cryptocurrencies. “Right now, if you’re a token that clearly has no value, then it’s legal, and if you’re a token that’s trying to return value or create value, then it’s illegal. That’s clearly the exact opposite of what you’re trying to achieve.”
The result is a glut of tokens that have “no clear reason to exist,” Jiang told Cointelegraph. The only lasting solution, he said, is for the industry to move toward tokens with meaningful value accrual mechanisms.
This is easier said than done.
“The challenge with [tokens] is that they serve a dual purpose,” Deeter told Cointelegraph. “On one hand, they’re marketing and user acquisition, and on the other hand, they’re long-term protocol governance. If you only optimize for one of them, it’s going to take you in the exact opposite direction.”
Alternatives to Airdrops
One option is to improve the existing airdrop model. Joseph said that instead of distributing tokens in large quantities at once, the protocol should lock tokens in smart contracts, which are gradually unlocked over a year.
Pixelverse, a non-fungible token (NFT) and gaming platform on The Open Network (TON), implemented this strategy with some success in its July 18 airdrop. The project locked its tokens in a staking contract with penalties as high as 90% for early withdrawals. Pixelverse’s PIXFI token traded nearly 50% higher in the hours after listing.
“The unlocking schedule helps align interests because you have to be selective and say, ‘What assets am I interested in during that 12-month period?’ ” Joseph said.
Another approach is to forgo token issuance altogether and choose other ways to incentivize users.
At least one startup is preparing to launch a decentralized marketplace where crypto protocols can programmatically incentivize user behavior, according to people familiar with the matter, who declined to name the protocol because it is still in the pre-launch phase.
Soon, regulatory barriers to value-accumulating token economies may begin to fall. In the U.S., regulators are beginning to greenlight transactional crypto products, former President Donald Trump is running an explicitly pro-crypto presidential campaign, and current President Joe Biden may be forced to soften his stance on crypto. This could open up opportunities for protocols to launch tokens with a more sustainable value proposition for holders.
“I see that world in the future,” Liang said. “If this industry is going to create real, sustainable value, then [the tokens] will need to have some accrual of value.”
