原文标题：Airdrops in the Barren Desert: Surveying the traits behind 2024』s 11% success rate
Original source: Keyrock
Original translation: TechFlow
Acquiring and retaining cryptocurrency users is difficult. Airdrops offer free tokens to attract long-term engagement, but often result in a quick sell-off. While some airdrops succeed in boosting user adoption, many fail. This article will explore the performance of airdrops in 2024 and the factors that influence the results.
Key Takeaways
Difficult to maintain
Most airdrops fail within 15 days. In 2024, 88% of tokens lost value within a few months, despite an initial price surge.
Massive airdrop, big winners
Airdrops distributing more than 10% of total supply show stronger community retention and performance, while those below 5% often see a quick sell-off after launch.
Follow FDV
Inflated fully diluted valuations (FDVs) have the biggest impact on projects. High FDVs constrain growth and liquidity, triggering large price drops after airdrops.
Liquidity is crucial
When there is not enough liquidity to support high FDV, many tokens fall under selling pressure. Deep liquidity is key to price stability after an airdrop.
A tough year
Cryptocurrencies have had a tough time in 2024, with most airdrops being the hardest hit. The few that have succeeded are: smart allocation, strong liquidity, and realistic FDV are their winning strategies.
Airdrops: The Double-Edged Sword of Token Distribution
Since 2017, airdrops have been a popular strategy for distributing tokens and generating early hype. However, in 2024, many projects have struggled to take off due to market saturation. While airdrops still generate initial excitement, most trigger short-term selling pressure, leading to low community retention and protocol abandonment. Despite this, a few standout projects have managed to stand out, proving that with the right execution, airdrops can still lead to sustainable long-term success.
Purpose
This report explores the airdrop phenomenon in 2024 - separating the winners from the losers. We analyzed 62 airdrops across 6 chains, comparing their performance across multiple dimensions: price action, user feedback, and long-term sustainability. While each protocol brings its own unique factors to the table, the overall data clearly demonstrates the effectiveness of these airdrops in achieving their intended goals.
Overall performance
When looking at the overall performance of the 2024 airdrops, most have failed to perform well after going live. While a few tokens saw impressive returns early on, most suffered downward pressure as the market reassessed their value. This pattern reflects a deeper problem in the airdrop model: many users may be simply looking to extract incentives rather than participate in the protocol long term.
With all airdrops, a key question arises — is the protocol sustainable? Do users still see value in the platform after the initial rewards are distributed, or is their participation simply transactional? Our analysis, based on data from multiple time periods, reveals an important finding: for most of these tokens, enthusiasm fades quickly, often within the first two weeks.
Overall performance
Looking at the 15-day, 30-day, and 90-day price action, we can see that most of the price action occurred in the first few days after the airdrop. After three months, only a few tokens were able to achieve positive returns, and only a few bucked the trend. Still, it’s important to consider the bigger picture: the overall crypto market underperformed during this period, which further complicated the situation.
Chain Classification
Despite the overall poor performance, not all chains performed poorly. Of the 62 airdrops we analyzed, only 8 had positive returns after 90 days - 4 on Ethereum and 4 on Solana. BNB, Starknet, Arbitrum, Merlin, Blast, Mode, and ZkSync all had no winners. Solana had a success rate of 25% and Ethereum had a success rate of 14.8%.
This is not surprising to Solana, as the chain has become a darling of retail investors over the past two years and poses a real challenge to Ethereum’s dominance. Considering that many of the other chains we analyzed compete directly with it, it is not surprising that only the parent chain retains these select winners.
While we did not consider Telegram’s TON network, we wanted to highlight that there have been quite a few successful airdrops on that network as enthusiasm and adoption grew.
Standardized performance
That being said, what happens if we try to separate the larger chains from their airdrops? Does the data look different if the price movement of the parent token is taken into account? When we normalize these airdrop prices to the performance of their respective ecosystems — for example, comparing an airdrop on Polygon to the price movement of $MATIC, or an airdrop on Solana to the price movement of $SOL — the results are still not encouraging.
Yes, the market has fallen, back off the 2023 highs, but that is still not enough to make up for the decline in airdrops, both compared to system tokens and other altcoins. These sell-offs have nothing to do with the larger narrative, but reflect the market's general concerns about developments in the short term. When projects that are already considered "mature" fall, people are more reluctant to accept something that is untested or "new".
The overall improvement has been modest at best, with Solana and Ethereum seeing maximum drawdowns of around 15% to 20% over some 90-day time periods, but this still suggests that these airdrops are far more volatile than other assets and are only relevant to the overall narrative, not price action.
Impact of Allocation on Performance
Another key factor that affects airdrop performance is the distribution of the token supply. How much of the token supply a protocol decides to distribute can significantly impact its price performance. This raises the key question: Will generous distribution pay off? Or is it safer to be conservative? Will giving users more tokens lead to more positive price performance, or will there be a risk of giving away too many too quickly?
To this end, we have divided airdrops into three categories:
Small Airdrop: < 5% of total supply
Medium airdrop: > 5% and ≤ 10%
· Large airdrops: > 10% We then analyzed their performance over three time periods — 15 days, 30 days, and 90 days.
In the short term (15 days), smaller airdrops (<5%) performed better, likely due to limited supply resulting in less immediate selling pressure. However, this initial success is often short-lived, and tokens from smaller airdrops experienced a significant sell-off within three months. This is likely due to a combination of factors: initially low supply suppressed selling, but over time, the narrative changed or insiders began to sell, and the entire community followed.
Medium-sized airdrops (5-10%) performed slightly better, balancing supply allocation and user retention. However, large airdrops (>10%) performed best over longer time frames. These larger allocations, while more risky in terms of short-term selling pressure, appear to enhance community ownership. By distributing more tokens, protocols may empower users with more equity, giving them a greater stake in the project's success. This in turn can lead to better price stability and long-term performance.
Ultimately, this data suggests that being more generous with token distribution pays off. Protocols that are generous with their airdrops tend to foster a more engaged user base, which leads to better outcomes.
Allocation Dynamics
Impact of Token Distribution
Our analysis shows that the size of an airdrop has a direct impact on price performance. Smaller airdrops create less initial selling pressure but tend to see a significant sell-off within a few months. On the other hand, larger allocations do generate more early volatility but ultimately lead to stronger long-term performance, suggesting that generous allocations encourage greater loyalty and support for the token.
Correlation distribution and market sentiment
Community sentiment is a key factor in the success of an airdrop, although it is often difficult to quantify. Larger token allocations are generally considered fairer, giving users a stronger sense of belonging and involvement. This creates a positive feedback loop - users feel more engaged and therefore less likely to sell their tokens, which promotes long-term stability. In contrast, smaller allocations may appear safer at first, but often lead to a short-lived enthusiasm followed by a rapid sell-off.
While it’s difficult to measure sentiment or “vibe” across the 62 airdrops, they remain important indicators of a project’s lasting appeal. Signs of strong sentiment include active and engaged user communities on platforms like Discord, organic discussions on social media, and genuine interest in the product. Additionally, the newness and innovation of a product often help maintain positive momentum because they attract more engaged users rather than opportunists looking for short-term rewards.
Impact of Fully Diluted Value (FDV)
An important research focus is whether a token’s fully diluted value (FDV) at launch has a significant impact on its post-airdrop performance. FDV represents the total market value of a cryptocurrency if all possible tokens were in circulation, including tokens that have not yet been unlocked or allocated. It is calculated by multiplying the current token price by the total token supply, which includes tokens in circulation, locked, vested, or future tokens.
In crypto, we often see projects with a fully diluted value (FDV) that is too high relative to the actual utility or impact of the protocol at launch. This raises a key question: are tokens penalized for having an inflated FDV at launch, or does the impact of FDV vary from project to project?
Our data includes a wide variety of projects, from those started with a modest FDV of $5.9 million to those with a staggering $19 billion – a difference of 3,000 times.
When we plot this data, a clear trend emerges: the larger the FDV at launch, the higher the probability of a significant price drop, regardless of project type, popularity, or community sentiment.
Reasons for FDV relationship
There are two key factors here. The first is a basic market principle: investors are attracted to the expectation of upward mobility. Tokens with smaller FDVs offer room for growth and the psychological satisfaction of "early investment", attracting investors with the promise of future gains. On the other hand, projects with inflated FDVs often have difficulty maintaining momentum because the expected upside is limited.
Economists have long discussed the concept of “market space.” As Robert Shiller notes, “irrational excess excitement” quickly fades when investors feel gains are limited. In crypto, this excitement can fade just as quickly when a token’s FDV indicates limited growth potential.
The second factor is more technical: liquidity. Tokens with large FDVs often lack the liquidity to support these valuations. When a large amount of incentives are allocated to the community, even if only a small portion of users want to cash out, it will create huge selling pressure and a lack of buyers on the other side.
Take $JUP, for example. The token launched at $6.9 billion in fully diluted value (FDV), supporting what we estimate to be $22 million in liquidity pools and market makers on launch day. This gives $JUP a liquidity-to-FDV ratio of just 0.03%. While this is lower than meme token $WEN, which has a 2% liquidity-to-FDV ratio, it is still relatively high among similar projects.
When we compare this to Wormhole, which launched with a fully diluted value (FDV) of $13 billion. To match the 0.03% liquidity ratio, Wormhole would need to have $39 million in liquidity across venues. However, even taking into account all available liquidity pools, both official and unofficial, as well as liquidity on centralized exchanges, our estimate is closer to $6 million, a fraction of the required amount. With 17% of tokens allocated to users, the potential unsustainability of market capitalization is already evident. Since launch, the price of $W has fallen 83%.
As market makers, we understand that without sufficient liquidity, prices become very sensitive to selling pressure. These two factors combined — the psychological demand for growth potential and the actual liquidity required to support a large FDV — explain why tokens with high FDVs have difficulty maintaining their value.
The data supports this view. Tokens with lower FDVs experienced significantly lower price drops, while those that launched with high valuations suffered the biggest price drops in the months following their airdrop.
Overall winners and losers
To get a deeper understanding of some of the projects, we have selected a winner and a loser from this airdrop season to examine. We will explore what they did right and where they made mistakes, resulting in successful project launches and less successful ones.
Airdrop Season: A Case Study of Winners and Losers
As we dive deeper into airdrop season, let’s look at a clear winner and an underperforming project to analyze the factors that led to their contrasting results. We'll examine what these projects did right—or what they did wrong—that ultimately impacted their success or failure in the community.
Winner: $DRIFT
First up, let’s introduce Drift, a decentralized futures trading platform that has been operating on Solana for nearly three years. Drift has experienced many triumphs and challenges along the way, including several hacks and vulnerabilities. However, each setback has forged a stronger protocol, evolving it into a platform that is far more valuable than just an airdrop farm.
When Drift’s airdrop finally arrived, it was met with a warm response, especially from its long-term user base. The team strategically allocated a relatively large 12% of the total token supply for the airdrop and introduced a clever bonus system that took effect every six hours after the initial distribution.
Launching with a relatively small market cap of $56 million, Drift surprised many, especially compared to other vAMMs (virtual automated market makers) that have smaller users, shorter histories, and higher valuations. Drift’s value quickly reflected its true potential, reaching a market cap of $163 million — a 2.9x increase since launch.
The key to Drift’s success is its fair and thoughtful approach to distribution. By rewarding long-term loyal users, Drift effectively filters out new Sybils, fosters a more authentic community, and avoids the negative fallout that is common in such events.
What makes Drift unique?
Long history and strong foundation
Drift’s proven history enables it to reward its existing loyal user base.
With a high-quality, market-proven product, the team can easily identify and reward truly active users.
Generous grading distribution
Allocating 12% of the total supply — a substantial percentage for an airdrop — demonstrates Drift’s commitment to the community.
The phased release mechanism helps reduce selling pressure and maintain the stability of value after launch.
The key is that airdrops are designed to reward actual usage, not just artificially boosted metrics by click farmers.
Realistic valuation
Drift’s conservative launch valuation avoids the trap of excessive hype and keeps expectations at reasonable levels.
Sufficient liquidity is injected into the initial liquidity pool to ensure the smooth operation of the market.
· The lower fully diluted valuation (FDV) not only makes Drift stand out, but also sparks a broader industry discussion about overvalued competitors.
Drift’s success is no accident; it’s the result of prioritizing product strength, fairness, and sustainability over short-term hype. As airdrop season progresses, it’s clear that protocols that want to replicate Drift’s success should focus on building strong fundamentals, fostering real user engagement, and maintaining a realistic view of market value.
$ZEND: From Hype to Crash — The Failed Case of Starknet Airdrop
ZkLend ($ZEND) is now facing a severe downturn - its value has plummeted by 95% and its daily trading volume cannot exceed $400,000. This is in stark contrast to a project that once had a market cap of $300 million. Even more strangely, ZkLend's total value locked (TVL) is now more than twice its fully diluted valuation (FDV) - an unusual phenomenon in the crypto world, and not a good one.
So how did a project that once garnered attention for its work around Starknet, a zk-rollup solution designed to scale Ethereum, end up in such trouble?
Riding the Starknet wave, but missing out
The concept of ZkLend is not innovative - it aims to be a platform for lending and borrowing various assets, relying on the Starknet narrative. The protocol has ridden the momentum of Starknet to position itself as a key player in the cross-chain liquidity ecosystem.
premise:
Generate a mining network where users can earn rewards in different protocols.
Attract users and liquidity through rewards and cross-chain activities.
However, in its implementation, the platform ended up attracting “hired mercenary” campaign participants — users who were only interested in short-term rewards and had no commitment to the long-term development of the protocol. Instead of building a sustainable ecosystem, ZkLend was dominated by reward-seeking users, resulting in short-lived engagement and low user retention.
The Counter-Effect of Airdrops
ZkLend’s airdrop strategy exacerbated its problems. Prior to the airdrop, there was a lack of significant product or brand recognition, and the token distribution attracted speculators rather than actual users. This critical failure—the failure to adequately vet participants—led to:
· Large rewards for hunters, eager to cash out quickly.
· Lack of loyalty and real engagement, no long-term commitment from participants.
The token value drops rapidly and speculators immediately sell their tokens.
Rather than building user stickiness and loyalty, the airdrop created a short-lived burst of activity that quickly faded.
Industry warning
The ZkLend experience teaches us a profound lesson: while hype and airdrops can attract users, they do not naturally create value, utility, or sustainable communities.
Key Lessons:
· Hype alone is not enough — building real value requires more than just the noise around a popular narrative.
Airdropping to unvetted users invites speculation and destroys value, as happened with ZkLend.
High valuations for new products come with significant risk, especially when there are no proven use cases.
in conclusion
If maximizing gains is the goal, selling on the first day is often the best strategy — 85% of airdropped tokens lose value within a few months. Solana became the leading blockchain for airdrops in 2024, but has performed relatively well overall after adjusting for market conditions. Projects like WEN and JUP have stood out as success stories, showing that a strategic approach can still yield impressive returns.
Contrary to common belief, larger airdrops do not always lead to sell-offs. A token with a 70% airdrop allocation achieved positive returns, highlighting the importance of FDV management. Overestimating FDV is a serious mistake. High FDV inhibits growth potential and, more importantly, causes liquidity issues - artificially high FDV requires a lot of liquidity to maintain, which is often difficult to obtain. Without sufficient liquidity, airdropped tokens are prone to drastic price drops because there is not enough capital to withstand selling pressure. Projects with realistic FDV and a solid liquidity provision plan are more resilient to post-airdrop volatility.
Liquidity is critical. When FDV is too high, it creates significant pressure. When liquidity is low, large sell-offs can depress prices, especially in airdrops where recipients often sell quickly. By maintaining a manageable FDV and focusing on liquidity, projects can increase stability and the potential for long-term growth.
Ultimately, the success of an airdrop depends on more than the size of the allocation. FDV, liquidity, community engagement, and story all matter. Projects like WEN and JUP have found the right balance and created lasting value, while others with inflated FDVs and shallow liquidity have failed to attract investor interest.
In a fast-changing market, many investors make decisions quickly - selling on the first day is usually the safest option. But for those investors who focus on long-term fundamentals, there are always some high-quality projects worth holding for the long term.
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