Crypto airdrops, a prevalent strategy since 2017 to distribute tokens and drum up initial hype, are increasingly facing challenges. Despite the initial hype, a recent study by KeyRock Trading highlights that tokens experience a dip in performance soon after listing.

Additionally, many airdropped tokens fail to maintain interest or value in the long term.

Airdrop Token Performance Analysis

The study, which analyzed 62 airdrops across six blockchain networks over the course of 2024, paints a clear picture of how effective these campaigns are. After 90 days, 88.7% of the tokens analyzed showed a decline in price, with only a few showing resilience.

Read more: How to Make Money from Airdrops in 2024

In the crypto ecosystem, airdrops are a way to boost protocol engagement and increase token distribution. However, the saturation of these strategies appears to have diluted their impact, leading to decreased community retention and sometimes even protocol abandonment.

“Looking at the price action over 15, 30 and 90 days, it is clear that most of the price action occurs in the first few days after the airdrop. After three months, very few tokens manage to show a positive result, with only a few bucking this trend,” Keyrock said here.

Airdrop Price Performance After 15, 30 and 90 Days of Listing. Source: Keyrock

Interestingly, while the overall performance of airdrops paints a bleak picture, not all results were disappointing. The data revealed that results varied significantly across different blockchains.

For example, Ethereum and Solana stood out, with 14.8% and 25% of their respective airdrops maintaining or increasing in value after three months. In contrast, other networks such as BNB, Starknet, Arbitrum, Merlin, Blast, Mode, and ZkSync did not see any airdrops with positive results.

The disparity in performance between the networks highlights the influence of network preference and user base characteristics. Solana, gaining popularity as a retail favorite and serious competitor to Ethereum dominance, has shown relatively better results, possibly due to its growing and engaged community.

Large airdrops tend to perform well

Additionally, KeyRock’s report also explored the role of token distribution strategies. It categorized airdrops based on the percentage of the total token supply distributed – small (less than 5%), medium (more than 5% but equal to or less than 10%), and large (more than 10%). The study suggests that the size of an airdrop can significantly influence both the initial market reaction and long-term viability.

Read more: Best Upcoming Airdrops in 2024

Airdrop Returns by Distribution Size. Source: Keyrock

In the short term, smaller airdrops tended to perform better, possibly due to less immediate selling pressure. However, these gains were often short-lived, with significant price drops occurring within three months. This suggests that while initial scarcity can curb immediate selling, it can also lead to delayed market corrections as conditions change or insiders decide to take profits.

Furthermore, medium-sized airdrops found a balance, showing slightly better retention and performance. However, it was the large-sized airdrops that really stood out over longer periods. These large distributions seemed to foster a stronger sense of community ownership, which could be key to stabilizing price fluctuations and sustaining user interest.

“Ultimately, this data suggests that being less stingy with token distributions pays off. Protocols that are generous with their airdrops tend to cultivate a more invested user base, leading to better outcomes over time,” Keyrock concluded.

The article Study shows that airdrop tokens plummet in up to 15 days; check out the exceptions was first seen on BeInCrypto Brazil.