Deep dive into airdrop data: After receiving tokens, should you sell or hold? How is the interaction value of top-tier projects that have not issued tokens?
In the past two years, only AI, Meme, and modular airdrops have performed well, while other tokens have no holding value. The expected airdrop value for Linea and Scroll single addresses is only a few hundred dollars.Author: On Chain Times
Compiled by: Nan Zhi, Odaily Planet Daily
Introduction
Points, points, points.
Since the launch of the points system by Friend.tech last August, rewarding early users of the protocol with off-chain points has become an industry standard. It can be said to have triggered the current wave of airdrops, with many projects issuing tokens over the past year. Like many trends in the crypto space, everyone rushed into this "gold rush," ultimately leading to excessive speculation in the entire industry and gradually losing its appeal.
Has the airdrop craze come to an end, or are we just taking a brief pause?
Conclusion Overview
In this article, the author summarizes the token trends of the 47 most notable airdrop projects over the past two years and analyzes several top-tier projects that have yet to issue tokens. The main conclusions include:
Only 23% of projects saw an increase after the airdrop; (it's more profitable to sell immediately)
Among the 47 airdrop tokens, only AI, Meme, and modular airdrops have seen significant increases;
From different networks, only Solana's airdrop has shown a positive increase from TGE to now, while Ethereum-based airdrops performed the worst;
12.7% of airdrop projects outperformed their ecosystem tokens within the year; (if you want to buy, older tokens have a higher win rate)
All Layer 2 airdrops have seen a decline in data across the board, except for Starknet;
Linea is expected to airdrop $251 per address, which the author believes is underestimated; (after the departure of Linea's co-founder yesterday, it would be good if they can issue tokens)
Scroll's general airdrop value is about $27, with 16.9% of users expecting returns of $1,350. The author believes that unless large funds participate in Scroll along with other projects to maximize benefits, the participation value is not significant;
Restaking has performed poorly, and the author believes it is unlikely to show excellent performance;
Berachain can attempt to collect various (expensive) NFTs and regularly participate in the testnet.
Airdrop Performance
Airdrop tokens have been criticized for their "only drop, no rise" performance. The following chart includes 47 of the most notable airdrop projects. As of August 25, 2024, only 11 saw price increases after TGE, with an average return of 49.56% (excluding BONK). Meanwhile, 36 airdrop projects have seen price declines since TGE, with an average loss of 62.15%.
Some tokens did see increases after TGE, with an average increase of 162.23% (excluding those that have consistently declined and BONK). However, the average drawdown from their all-time high (ATH) for these tokens is -70.89%.
Note: Each token in the chart below has three bars: the first represents the price change from launch to now, the second represents the historical maximum increase after launch, and the third represents the price change from the highest point to now.
Source: CoinMarketCap & CoinGecko, as of August 25, 2024.
The trend is clear: aside from certain popular sectors in this cycle (such as Meme and AI), most airdrops since 2023 have been in free fall (even if some saw increases at certain stages).
Average performance of airdrop tokens from TGE to now, from TGE to ATH, and from ATH to now. Outlier bars are truncated and marked in red. Source: CoinMarketCap & CoinGecko, as of August 25, 2024.
On average, since TGE, only AI, Meme, and modular airdrops have shown significant increases, while airdrops in other sectors have performed poorly. The Meme category is the strongest performing sector, with an average increase of 2300% since TGE, with BONK contributing the most.
In fact, BONK, in my view, saved Solana, or rather "Soylana" from two years ago, rescuing it from despair after FTX. Many users of Pump.fun should thank this cartoon dog.
Average performance of airdrop tokens categorized by ecosystem, from TGE to now, from TGE to ATH, and from ATH to now. Outlier bars are truncated and marked in red. Source: CoinMarketCap & CoinGecko, as of August 25, 2024.
Categorized by ecosystem, only Solana's airdrop has increased from TGE to now, mainly due to the contribution of BONK, while Ethereum-based airdrops performed the worst, and Cosmos-based airdrops showed the most volatility.
The average increase from TGE to ATH for Cosmos is 201% (the 850% increase of TIA inflated this figure), and Cosmos staking airdrops were all the rage in the fourth quarter of 2023. The Cosmos staking airdrop triggered a brief secondary trend of "staking airdrops for more airdrops," but this trend vanished as quickly as it arose, with no significant airdrop rewards for stakers except for DYM (which dropped 61.1% after TGE).
Some may argue that the performance so far and the drawdown from ATH are due to the overall altcoin market environment rather than airdrop-specific phenomena, but when comparing the annual performance of their respective ecosystem tokens, only 6 out of the 47 tokens (half of which are Meme or AI) outperformed their ecosystem tokens.
Relative performance of airdrop tokens from TGE to now compared to their ecosystem tokens' annual performance. Outlier bars are truncated and marked in red. Source: CoinMarketCap & CoinGecko, as of August 25, 2024.
The crypto community (CT) attributes this phenomenon to low circulation and high FDV token economics, complaining that these tokens are merely tools designed for VC exits, thus almost destined to "only drop, no rise." While this statement has some merit, especially considering that most of these tokens' functions are limited to governance rights and their value is ambiguous, there seems to be a deeper and more concerning issue: projects that rely on user volume and usage, whether measured by TVL, trading volume, or other metrics, have shown disturbing trends after TGE.
Layer 2
TVL changes over time for L2s conducting airdrops in 2024, as of August 16, 2024. The dashed line indicates the TGE date. Source: DefiLlama.
The new L2 projects that have garnered attention have performed poorly in terms of TVL growth, or have shown a trend of "only drop, no rise."
Blast and zkSync Era are the most obvious examples; these two airdrop projects, which were heavily farmed, seem to have lost market attention after TGE.
Manta Pacific initially performed strongly, attributed to their "new paradigm" marketing campaign, but after allowing funds to leave Manta cross-chain on March 26, 2024, the chain's TVL saw a significant decline, dropping 94% from ATH. A similar situation may be unfolding with Mode, which delayed 50% of the allocation for the top 2000 wallets by 3 months and stipulated that funds could not leave during this period. Aside from this, Mode's relative strength may also be due to its second-quarter points program (which Manta does not have) and its inclusion in Optimism's Superfest.
Taiko chose to conduct TGE at the mainnet launch, creating the illusion that TGE had a positive impact on TVL; however, its TVL is only $14 million, indicating little market interest.
It is noteworthy that Starknet's TVL has clearly not followed this trend, but instead surged after TGE. While this is indeed an impressive performance, its disconnect from market sentiment raises questions. Did Starknet's last 8 users resurrect Starknet? Before Starknet supporters criticize me, it should be noted that the data from that Dune dashboard is inaccurate; the daily active users on June 4, 2024, were actually 21,200, a 94% decrease from two months prior's ATH. Starknet raised $282.5 million at an $8 billion valuation, meaning its TVL is still 18% less than the amount raised. In contrast, Blast raised only $20 million, but its TVL is 190% higher than the amount raised.
Cross-Chain
Looking at LayerZero's daily transaction volume, the situation becomes clearer.
After announcing the first ZRO airdrop snapshot on May 1, 2024, daily transaction volume plummeted by 52% to about 45,000 transactions. It is currently down to less than 7,000 transactions, a 92% drop from the May 1 level.
Farmers, witch attackers (whatever you call them) have been the driving force behind the popularization of cryptocurrencies in this cycle, or at least created the illusion of such. While LayerZero belongs to the "old guard" as it does not have a points program, it has long hinted at issuing tokens, prompting users to act accordingly and trade as much as possible to maximize airdrop benefits.
These transaction volumes are exaggerated data that LayerZero showcased to VCs during its $12 million Series B funding round in April 2023 (Source: CryptoRank).
Comparing airdrops before August 2023 (which can be considered part of the previous cycle), a starkly different picture emerges (of course, we are discussing project performance, not token performance). Aside from Aptos, which had to conduct TGE at mainnet launch due to APT being the gas token, Optimism and Arbitrum had already been live on the mainnet for over a year before releasing governance tokens, and they developed quite robustly.
This contrasts sharply with the opportunistic environment of this cycle, where many projects accelerated their mainnet and TGE timelines to obtain funding returns as soon as possible. At that time, the L2 space was still in its infancy, far from the current situation where it seems a new L2 launches every month.
Points Should Exit the Stage
Looking back at some of the largest airdrops in history (ranked by historical peak value), at least 7 of them were unexpected surprises for those who received the airdrops, and this positive sentiment likely propelled these tokens to rise rapidly after TGE.
The largest 10 airdrops in cryptocurrency history Source: CoinGecko Research
In the previous cycle, most airdrops were popular because they were seen as "free money." Towards the end of the cycle, intentional airdrop farming became more popular, but it was nowhere near becoming the mainstream mindset as it is in this cycle. Although Friend.tech's points system initially sparked market interest, the innovation quickly turned into a tedious old routine within just a few months as every project began rolling out its own points program while waiting for the bear market to end for TGE.
Season after season, points farming has gradually required more and more time and capital, diminishing the appeal of airdrops. Airdrops are no longer "free money"; they now require actual costs, leading to almost every recent airdrop being questioned at TGE, falling into a "death spiral."
It's time for the points universe to exit the stage. If projects can no longer explicitly exploit points and leaderboards to extract all value from "Farmers," and if overall market sentiment turns bullish, Farmers may still benefit again.
Are These Top-tier Projects Still Worth Participating In?
Many projects are on the road to TGE, so we will only discuss a few (top-tier projects).
Linea and Scroll
Linea and Scroll are the last two large L2s without tokens (assuming Base does not issue tokens). Scroll raised $80 million at an $1.8 billion valuation, while Linea's parent company Consensys has raised a total of $725 million at a $7 billion valuation.
While Consensys has many other projects (including MetaMask), it is certain that Linea has strong financial backing. Compared to zkSync and Starknet, which raised $458 million and $282.5 million respectively, both valued at $8 billion, Linea at least has the potential for good performance. STRK briefly reached a FDV of $50 billion within minutes after TGE, exceeding its valuation by 6 times, while ZK listed with a FDV of about $4.7 billion, becoming a generous airdrop for zkSync Farmers and developers who accidentally participated in the Starknet hackathon.
Therefore, I believe that users who participated in the Surge event on Linea or before the Scroll Mark launch can expect a Christmas gift in Q4. If you are a latecomer, it will require significant funds to catch up, but if you farm across multiple protocols (for example, providing WRSETH/ETH liquidity on Ambient to farm Kelp, Scroll, and Ambient simultaneously), it may be worth it.
(Odaily Note: Scroll Mark is the points system they launched.)
Linea Math Problem
Whales Market data shows that the current valuations of LXP and LXP-L are $0.11 and $0.003 respectively, meaning the average airdrop associated with LXP-L is only $109, and the overall airdrop for LXP-L is about $234 million.
OpenBlock Linea Surge Dashboard as of September 2, 2024.
According to @nvthao's Dune dashboard, most users hold 1000-1499 LXP, meaning the average airdrop value for most users is only $137.
Additionally, there is the Linea Voyage testnet NFT, with its Delta version currently priced at 0.00187 ETH (about $5) on Element.
If the expected value is accurate, an ordinary Linea Farmer can only obtain $251 from the testnet Voyage, several mainnet Voyages, and 6 Surges, which may be close to $150 after deducting gas fees. I personally believe the expected value is overly pessimistic, possibly due to the trauma of L2 airdrops. If market sentiment rebounds, the value of LXP should be at least $0.50.
Nevertheless, I still believe that most ordinary users will be disappointed with Linea, as driving transactions is no longer as profitable as it once was, and projects are more focused on TVL.
Scroll Math Problem
The math for Scroll is simpler. According to Whales Market (but with very low trading volume), Scroll Mark is currently valued at about $0.27, so most wallets holding 0-100 Mark are worth about $27, but we are only in the first phase, and this number will continue to increase. The number of wallets holding over 5000 Mark is quite considerable, reaching 16.9%, with expected returns of about $1,350.
Dune Dashboard for @barsus 777 Scroll Mark as of September 2, 2024.
Additionally, there is Scroll Canvas, which is an NFT badge based on transactions. Although the project has moved away from allocating large amounts of tokens based on trading activities, I still find it hard to believe that these badges are unrelated to airdrop allocations. Since they are separate from the points program, they may be considered as multipliers for points.
Overall, unless you start interacting before the Mark release, I believe there are better places to invest funds. If you can invest tens of thousands of dollars in Mark, it might be worth a try.
Restaking
Among the 7 largest ETH liquid staking protocols, only 2 have already airdropped: EtherFi and Renzo. Although their token performances have been disappointing, dropping 60.4% and 79.7% respectively since TGE, EtherFi has shown considerable strength, solidifying its position as the preferred LRT. Meanwhile, Renzo's TVL stagnated after TGE and began to decline significantly months later. This is likely because withdrawals were only allowed in June, leaving many Farmers trapped when ezETH decoupled in the open market.
Other major LRTs have not seen much growth after the airdrop craze subsided, so I doubt there will still be good performance.
We are still waiting for EIGEN's TGE, but the pre-market price on Whales Market is $3.62, meaning that most Farmers would not even earn $400 with an additional 100 EIGEN. We may see Karak and Symbiotic rush to TGE ahead of EIGEN, but interacting with these projects requires significant funds.
Berachain and Monad
Finally, we have two of the most mysterious and highly anticipated projects we've seen: Berachain and Monad. Over the past 6 months, CT has shown a lot of interest in these two projects, but it is currently unclear how to interact precisely, and there is no sight of mainnet launch dates. Considering they raised $142 million and $244 million respectively, with the former valued at $420.69 million (haha), this will certainly be a feast for those receiving airdrops.
Starting with the relatively less mysterious Berachain, collecting various (expensive) Bera NFTs and obtaining exclusive Discord roles may yield the highest returns. If you don’t like trading NFTs, the best approach is to regularly interact with major DApps on the testnet (BEX, BEND, BERPS, etc.). Collecting badges through TheHoneyJar's tasks is a good way, although they are not directly affiliated with Berachain. That said, testnet interactions may ultimately yield no results (always remember the lesson from Sui).
Monad is basically a "cult," at least the only way to interact for now is to build a reputation on its social platform, as there is no testnet yet.
