Crypto Airdrops Faced a Dismal 2024, With 88% of Tokens Failing to Maintain Value

A recent report by Keyrock highlights the challenges of 2024's airdrop season, revealing that only 8 of 62 airdrops delivered positive returns after 90 days.

2024 has seen a challenging landscape in the world of crypto airdrops, with a vast majority (88%) of airdropped tokens failing to maintain their value. This trend has sparked concerns among investors and enthusiasts, especially considering the high fully diluted valuations (FDVs) linked to many of these projects.

A recent report by Keyrock sheds light on the difficulties faced during 2024's airdrop season, revealing that out of 62 airdrops, only 8 delivered positive returns after 90 days. This translates to a mere 11% success rate, with Solana and Ethereum emerging as the only blockchains to host winning tokens.

Despite airdrops being touted as a strategy to distribute tokens and generate initial excitement, the 2024 data reveals that 88% of tokens declined in value within the first few months, typically following brief price spikes. Of the 62 airdrops studied, only 4 tokens on Ethereum and 4 on Solana managed to post gains after three months, while chains like BNB, Starknet, and Arbitrum saw no winners.

One of the key takeaways from Keyrock's report is the detrimental impact of high FDVs on token performance. Projects that launched with inflated valuations encountered sharp price declines. The report highlights that high FDVs restrict growth potential and limit liquidity, making it difficult for tokens to maintain their value once recipients begin selling.

The correlation between FDV and liquidity is crucial, as tokens with insufficient liquidity to support their FDVs crumble rapidly under sell pressure.

For example, ZKLend, a project that launched on Starknet with high expectations, saw its value plummet by 95%, showcasing how unsustainable FDVs can crush a token's market value.

However, not all airdrops ended in愁苦. Drift, a decentralized futures trading platform on Solana, emerged as one of the standout winners. The project launched with a conservative FDV of $56 million and meticulously managed its token distribution, rewarding long-term users rather than attracting opportunistic traders. By prioritizing community engagement and liquidity, Drift managed to triple its market cap, reaching $163 million post-launch.

2024's airdrop landscape demonstrates that while token giveaways can generate early buzz, their long-term success hinges on careful execution.

Projects that launched with realistic FDVs, sufficient liquidity, and strategic distribution plans, like Drift, have managed to thrive. On the other hand, tokens with inflated valuations, such as ZKLend, have struggled to maintain their value in the months following the airdrop.