Author:Aylo

Compiled by: TechFlow

Airdrops played a major role in this cycle.

I’m curious how many tokens launched via airdrops are still trading above their issue price after their first day of listing.

This may answer the question of whether or not one should hold an airdrop (and whether holding it will be profitable).

I sorted the data and only looked at the top 500 tokens. Although the prices used are from this morning, there may be some lag, but it should reflect the overall trend.

Here are the key findings:

  • 23 of the 31 tokens have lost value since their initial offering, some dramatically

  • Only 4 of 31 tokens have outperformed BTC since initial coin offering

  • Only 1 Token Launched in 2024 Outperformed BTC Since Initial Coin Offering

  • Two meme-related airdrops were very successful - BONK and DEGEN. Despite the current controversy, TIA is also priced well above its launch price, but outperforming BTC.

Selling the airdropped tokens for USD or BTC on the day of the launch is almost always the right choice. You may get lucky (some call it skill) and sell during the initial post-launch rally, but in general, the longer you hold, the worse the performance.

There are always exceptions, but the odds of holding the right airdropped token are very low, especially relative to BTC. If you are really bullish on a project long term, you can almost always buy it after the launch date at a lower price. The next bear market may make these tokens a better investment. There are some really good projects on this list.

Airdrops aren’t the only reason these projects’ tokens are going down. Many times, they work with market makers to set valuations too high. Users ruthlessly sell off the airdropped tokens and soon find out that the valuations they set themselves are complete bullshit.

Many people learned during this cycle that FDV actually matters. Holding an airdrop means you believe there is enough demand for the token to push the price higher in the event of a massive unlock and investors hedge their shorts.

Mercenaries will sell no matter the price because they are only there to extract their gains and leave. However, in theory, tokens should be able to recover from these “mercenaries” exiting, but most of the time data shows that they do not. Of course, some of these tokens still have time. This is just a random snapshot and the situation can change quickly.

People love to complain that many airdrops are poorly designed, but based on this data it seems difficult to execute an airdrop that doesn’t negatively impact the token in the short and medium term (long term TBD).

Two accidentally airdropped meme tokens (without a points program) have delivered the best returns to holders at very low initial valuations. Both are designed to help different ecosystems (Solana and Farcaster).

We have seen many meme airdrops drop to zero in the past, so you certainly can’t assume that meme airdrops will definitely perform better. Surprise + undervaluation may be a better conclusion.

I actually think points programs will continue to exist as they are a very common feature of Web2 and can bring more fun, motivation, and stickiness to the user experience, but I don’t expect airdrops to continue in the form we’ve seen over the past few years.

Based on this data, project owners should consider the form of airdrops very carefully, or whether to decide to conduct airdrops.