Original article by Stacy Muur (@stacy_muur)

Original translation: Peisen, BlockBeats

Editor's note: Delphi Digital conducted a study on the current status of airdrops. From the original Uniswap to the recent large-scale protocols that have caused numerous controversies due to the points system, airdrops have become increasingly frothy, and the inability of protocols to retain customers has become the most significant trend. Encryption researcher Stacy Muur summarized the contents of the report. The original text is compiled as follows:

Airdrop status in 2024: users are frustrated and protocol fundamentals are declining.

Delphi Digital wrote a report titled “Do Airdrops Hurt More Than Help?” and here are the key insights. This report is essential for users and a must-read for founders.

The Uniswap airdrop marked a pivotal moment for the Web3 market, and even four years later, it remains the largest airdrop ever, valued at a staggering $6.4B at its peak.

Since then, the industry has undergone significant changes, giving rise to witches and drop farmers.

The 50 largest airdrops in the cryptocurrency space have distributed over $26.6 billion in value.

This “free money” opportunity has not gone unnoticed. Now, every exciting cryptocurrency protocol launch attracts Sybils and bots eager to get a large portion of the initial airdrop tokens. As a result, protocols develop new airdrop standards and anti-sybil measures.

Initially, a fixed reward system was used (Uniswap). Then, tiered airdrops appeared (Jito). The Optimism team promoted multiple criteria-based airdrops. Now, we have a points system.

However, the main problem with airdrops for many dApps popular with airdrop hunters is the bubble effect: once a snapshot is taken, usage metrics drop dramatically.

Let’s take LayerZero as an example. Since April, Stargate bridge volume has dropped from $1.67 billion to $406.7 million, a 75% drop in volume. I personally have never farmed $ZRO, and my allocation is pretty modest — around $400. This pattern is very mainstream.

Prior to the $ZK airdrop, zkSync generated daily fees comparable to Arbitrum. However, this number has been declining since the snapshot announcement and token distribution. Recently, daily fees fell below $10,000 for the first time since the launch of zkSync Era.

Delphi Digital’s research explores similar cases in detail, including Kamino, Parcl, Jito, and Manta Network. All of them show a similar pattern: after the snapshot, activity experiences a significant drop, and subsequent incentives reveal the reality of PMF.

The biggest problem with this inorganic growth is fair protocol evaluation and making smart investment decisions. Here are a few things that may help:

• Track DAU and MAU metrics over time to see if there is a drop after the announcement of the airdrop snapshot and subsequent incentives.

• Measure how many users continue to use the platform after a predetermined period of time (e.g., 1 week, 1 month) after the airdrop.

• Measure the ratio of DAU or WAU of new users compared to existing users.

• Monitor the number of transactions per user.

Monitor which features are being used and how often. Continued or increased usage of core features after the airdrop indicates continued interest or product-market fit.

• Track wallet engagement metrics.

• Monitor community discussion and activity on governance forums.

Another problem with the 2024 airdrops is the widespread adoption of the “low float, high FDV” token model by many new protocols. This model makes it difficult for new buyers to assess growth potential and offset airdrop selling pressure.

But that's another story.

Personal note: Airdrops can attract new users, some of whom may stay. However, this is similar to giveaways on X: some users will visit, some may become active readers, but most will disappear.

As an investor, differentiate between organic and inorganic growth. As a protocol, make sure you can retain your users to build a long-term successful product.

Original link