From airdrop diamond hands to having nothing: 70% of airdrop coins have already dropped significantly by TGE

Author: Aylo

Airdrops played an important role in this cycle.

I am curious about how many tokens launched through airdrops are still priced above their issuance price after the first day of listing.

This may answer the question of whether one should hold airdrops (whether holding can yield profits).

I compiled the data and only studied the top 500 tokens. Although the prices used are from this morning and may be somewhat lagging, they should reflect the overall trend.

Here are the main findings:

• Since their initial issuance, 23 out of 31 tokens have seen their prices drop, some quite significantly.

• Since their initial issuance, only 4 out of 31 tokens have outperformed BTC.

• Since their initial issuance, only 1 token launched in 2024 has outperformed BTC.

• Two meme-related airdrops have been very successful ------ BONK and DEGEN. Despite current controversies, TIA's price is also well above its issuance price, outperforming BTC.

Selling airdrop tokens for USD or BTC on the issuance day is almost always the right choice. You might be lucky (some call it skill) to sell during the early price surge after issuance, but overall, the longer you hold, the worse the performance.

There will always be some exceptions, but the chances of holding the right airdrop tokens are very low, especially compared to BTC. If you are really optimistic about a project's long-term prospects, you can almost always buy in at a lower price after the issuance day. The next bear market may make these tokens better investments. There are indeed some good projects on this list.

Airdrops are not the only reason for the decline in these project tokens. Many times, they are overvalued in conjunction with market makers. Users ruthlessly sell off airdrop tokens and soon realize that the valuations they set themselves are completely nonsensical.

Many people have learned in this cycle that FDV is actually important. Holding an airdrop means you believe there is enough demand for the token to push up the price in the event of a large-scale unlock and investors hedging short.

Yield farmers will sell regardless of the price because they are just there to extract profits and then leave. However, theoretically, tokens should be able to recover from these "mercenary" exits, but most data shows they have not. Of course, some of these tokens still have time. This is just a random snapshot, and the situation can change rapidly.

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

Two unexpected meme tokens from airdrops (without a points system) provided the best returns for holders with very low initial valuations. They were designed to support different ecosystems (Solana and Farcaster).

In the past, we have also seen many meme airdrops instantly go to zero, so you certainly cannot assume that meme airdrops will necessarily perform better; unexpected + low valuation may be a better conclusion.

I actually believe that points systems will continue to exist because they are a very common feature of Web2 and can bring more fun, engagement, and stickiness to the user experience, but I do not expect airdrops to continue in the form we have seen in the past few years.

Based on this data, project teams should be very cautious in considering the form of airdrops or whether to decide to conduct them.