2024 Survey of 60+ Airdrops: Maximizing Profit by Selling on Day One, Large-Scale Airdrops Don't Always Lead to Sell-Offs
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2024 Survey of 60+ Airdrops: Maximizing Profit by Selling on Day One, Large-Scale Airdrops Don't Always Lead to Sell-Offs
This article will explore the performance of airdrops in 2024 and the factors influencing their outcomes.
Navigating Web3 tides with focused insightsAuthor: Keyrock
Compiled by: TechFlow
Acquiring and retaining cryptocurrency users is difficult. Airdrops attract long-term engagement by offering free tokens, but often lead to rapid sell-offs. While some airdrops successfully boost user adoption, many fail. This article explores the performance of airdrops in 2024 and the factors influencing their outcomes.
Key Takeaways
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Retention Is Hard
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Most airdrops fail within 15 days. In 2024, 88% of tokens depreciated within months despite initial price spikes.
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Bigger Airdrops, Bigger Winners
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Airdrops distributing over 10% of total supply show stronger community retention and performance. Those below 5% often face immediate dumping upon launch.
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Focus on FDV
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Inflated fully diluted valuation (FDV) impacts projects most severely. High FDV constrains growth and liquidity, triggering sharp post-airdrop price declines.
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Liquidity Is Crucial
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When insufficient liquidity supports high FDV, many tokens collapse under selling pressure. Deep liquidity is key to post-airdrop price stability.
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A Tough Year
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2024 was challenging for crypto, with most airdrops hit hardest. The few successful cases shared common strategies: smart allocation, strong liquidity, and realistic FDV.
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Airdrops: A Double-Edged Sword in Token Distribution
Since 2017, airdrops have been a popular strategy for distributing tokens and generating early hype. However, in 2024, many projects struggled to gain traction due to market saturation. While airdrops can still spark initial excitement, most trigger short-term selling pressure, leading to low community retention and abandoned protocols. Nevertheless, a few standout projects succeeded, proving that with proper execution, airdrops can still drive sustainable long-term success.
Purpose of the Study
This report examines the airdrop phenomenon in 2024—distinguishing winners from losers. We analyzed 62 airdrops across six blockchains, comparing their performance across multiple dimensions: price trajectory, user sentiment, and long-term sustainability. While individual protocols introduced unique variables, the overall data clearly reveals how effective these airdrops were at achieving their intended goals.
Overall Performance
Examining the overall performance of 2024 airdrops, most failed to sustain positive momentum after launch. While a few tokens delivered solid early returns, the majority faced downward pressure as the market re-evaluated their value. This pattern reflects a deeper issue with the airdrop model: many users may be incentivized solely to claim rewards rather than engage with the protocol long-term.
A critical question arises for all airdropped protocols: do they possess sustainability? After initial reward distribution, can users still see value in the platform, or was their participation purely transactional? Our analysis, based on data across multiple timeframes, reveals a significant finding: enthusiasm fades quickly for most of these tokens, typically within the first two weeks.
Aggregate Performance
Observing price movements at 15-day, 30-day, and 90-day intervals, most volatility occurs in the first few days after the airdrop. After three months, only a small number of tokens achieve positive returns, with even fewer defying broader market trends. That said, context matters: the entire crypto market performed poorly during this period, complicating the landscape.
Breakdown by Chain
Despite poor overall results, not all chains performed equally badly. Among the 62 airdrops analyzed, only eight delivered positive returns after 90 days—four on Ethereum and four on Solana. BNB, Starknet, Arbitrum, Merlin, Blast, Mode, and ZkSync had no winners. Solana achieved a 25% success rate; Ethereum, 14.8%.
This isn’t surprising for Solana, which has become a favorite among retail investors over the past two years and poses a real challenge to Ethereum’s dominance. Given that many other chains we analyzed directly compete with it, it’s unsurprising that only the parent chains retained these select winners.
Although we did not include Telegram's Ton network in our analysis, we want to highlight that several successful airdrops have indeed occurred there, fueled by rising enthusiasm and adoption.
Normalized Performance
That said, what changes if we attempt to separate larger chains from their airdrops? Would the data look different when factoring in the price movement of the parent token? When we normalize airdrop prices against the performance of their respective ecosystems—for example, comparing Polygon airdrops to $MATIC’s price movement, or Solana airdrops to $SOL—we still find bleak results.
Yes, the market has declined from 2023 highs, but this isn't enough to offset the airdrops’ underperformance, whether measured against system tokens or other altcoins. These sell-offs aren't tied to broader narratives but reflect widespread market caution about near-term developments. When even projects considered “mature” are declining, investors are less willing to embrace untested or “new” offerings.
Any overall improvement is at best marginal. Solana and Ethereum saw maximum drawdowns of around 15% to 20% in some 90-day periods, but this still indicates that airdropped tokens are far more volatile than other assets—tied only to general sentiment, not actual price trends.
Impact of Allocation on Performance
Another key factor affecting airdrop performance is the allocation of token supply. How much of its supply a protocol chooses to distribute significantly impacts its price performance. This raises crucial questions: does generous distribution pay off? Or is a conservative approach safer? Does giving users more tokens lead to better price performance, or does releasing too much too soon create risk?
To examine this, we categorized airdrops into three groups:
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Small Airdrops: < 5% of total supply
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Medium Airdrops: > 5% and ≤ 10%
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Large Airdrops: > 10%
We then analyzed their performance across three timeframes—15 days, 30 days, and 90 days.
In the short term (15 days), smaller airdrops (<5%) performed better, likely because limited supply reduced immediate selling pressure. However, this early success was often fleeting, as tokens from smaller airdrops experienced clear sell-offs within three months. This may result from a combination of factors: initially low supply suppressed dumping, but over time, shifting narratives or insider sales triggered broader community sell-offs.
Medium-sized airdrops (5–10%) performed slightly better, balancing supply distribution and user retention. Yet large airdrops (>10%) performed best over longer periods. While these larger distributions carry higher short-term selling risk, they appear to strengthen community ownership. By distributing more tokens, protocols may grant users greater equity, increasing their stake in the project’s success. This, in turn, can lead to better price stability and long-term performance.
In the end, the data suggests generosity pays off. Protocols conducting more generous airdrops tend to cultivate more engaged user bases, leading to better outcomes.
Allocation Dynamics
Impact of Token Allocation
Our analysis shows that the scale of an airdrop directly affects price performance. Smaller airdrops cause less initial sell-off pressure but often experience significant dumping over months. In contrast, larger distributions create more early volatility but ultimately lead to stronger long-term performance, indicating that generous allocations can foster greater loyalty and token support.
Linking Allocation to Market Sentiment
Community sentiment is a key factor in airdrop success, though often hard to quantify. Larger token allocations are generally perceived as fairer, giving users a stronger sense of ownership and involvement. This creates a positive feedback loop—users feel more invested and are thus less likely to sell, promoting long-term stability. In contrast, smaller allocations may seem safer initially but often result in fleeting excitement followed by rapid dumping.
While it's difficult to measure the sentiment or "vibe" of 62 airdrops, such factors 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. Moreover, a product’s novelty and innovation often help maintain positive momentum by attracting more committed users rather than opportunistic reward hunters.
Impact of Fully Diluted Value (FDV)
A major focus of our research was whether a token’s fully diluted valuation (FDV) at launch significantly impacts its post-airdrop performance. FDV represents the total market value of a cryptocurrency if all possible tokens—including those not yet unlocked or distributed—were in circulation. It is calculated by multiplying the current token price by the total token supply, including circulating, locked, vested, or future tokens.
In crypto, we often see projects with FDVs that appear inflated relative to the actual utility or impact of the protocol at launch. This raises a critical question: are tokens penalized for launching with bloated FDVs, or does FDV impact vary by project?
Our dataset includes projects launching with FDVs ranging from a modest $5.9 million to a staggering $19 billion—a 3,000x difference.
When plotting this data, a clear trend emerges: the higher the FDV at launch, the greater the probability of a sharp price decline, regardless of project type, popularity, or community sentiment.
Reasons Behind the FDV Relationship
Two key factors explain this. First is basic market psychology: investors are drawn to upward momentum. Tokens with lower FDVs offer room for growth and the psychological satisfaction of being an "early investor," appealing to promises of future returns. In contrast, projects with inflated FDVs struggle to maintain momentum because the expected upside is limited.
Economists have long discussed the concept of "market space." As Robert Shiller noted, "irrational exuberance" fades quickly when investors perceive constrained gains. In crypto, when a token’s FDV signals limited growth potential, excitement vanishes just as fast.
The second factor is more technical: liquidity. High-FDV tokens often lack the liquidity needed to support their valuations. When large incentives are distributed to the community, even a small number of users cashing out can create massive sell-side pressure—with few buyers on the other side.
Take $JUP, for example. It launched with a $6.9 billion fully diluted valuation (FDV), backed by an estimated $22 million in liquidity pools and market makers on launch day. This gives $JUP a liquidity-to-FDV ratio of just 0.03%. While lower than meme token $WEN, which boasts a 2% ratio, it remains relatively high for its category.
Compare this to Wormhole, which launched with a $13 billion FDV. To match JUP’s 0.03% liquidity ratio, Wormhole would need $39 million in liquidity across venues. Yet, even accounting for all available liquidity—official and unofficial pools, plus centralized exchange depth—our estimate is closer to $6 million, a fraction of what’s required. With 17% of tokens allocated to users, the market cap’s inherent unsustainability became evident. Since launch, $W’s price has dropped 83%.
As market makers, we know that without sufficient liquidity, prices become extremely sensitive to sell pressure. These two factors—psychological demand for growth potential and the practical liquidity needed to support large FDVs—explain why high-FDV tokens struggle to retain value.
The data confirms this. Low-FDV tokens experienced far milder price drops, while those launching at high valuations suffered the steepest declines in the months following their airdrops.
Overall Winners and Losers
To gain deeper insights into specific projects, we selected one winner and one loser from this airdrop season for detailed study. We will explore what they did right—and where they went wrong—revealing the factors behind successful versus unsuccessful launches.
Airdrop Season: Case Studies of a Winner and a Loser
As we delve deeper into the airdrop season, let’s examine one notable winner and one underperforming project to analyze the factors behind their divergent outcomes. We’ll investigate what these projects did right—or wrong—that ultimately shaped their success or failure within the community.
Winner: $DRIFT
First, consider Drift, a decentralized futures trading platform operating on Solana for nearly three years. Throughout its development, Drift has experienced both victories and setbacks, including several hacks and vulnerabilities. Yet each challenge forged a stronger protocol, evolving into a platform far more valuable than a mere airdrop farm.
When Drift’s airdrop finally arrived, it was met with enthusiastic reception—especially from its long-standing user base. The team strategically allocated 12% of the total token supply for the airdrop, a relatively large share, and introduced a clever bonus mechanism that activated every six hours after the initial distribution.
Launching with a modest $56 million market cap, Drift surprised many—especially compared to other vAMMs (virtual automated market makers) with fewer users and shorter histories but higher valuations. Drift’s value quickly reflected its true potential, reaching a $163 million market cap—an increase of 2.9x post-launch.
The key to Drift’s success was its fair and thoughtful distribution. By rewarding long-term loyal users, Drift effectively filtered out newly created Sybil accounts, cultivated a more authentic community, and avoided the negative consequences common in such events.
What Made Drift Stand Out?
Long History and Strong Foundation
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Drift’s mature history enabled it to reward an existing, loyal user base.
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With a high-quality, market-tested product, the team could easily identify and reward genuinely active users.
Generous Tiered Distribution
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Distributing 12% of total supply—a substantial portion for an airdrop—demonstrated Drift’s commitment to its community.
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A phased release mechanism helped reduce sell-off pressure, maintaining post-launch value stability.
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Crucially, the airdrop was designed to reward actual usage, not just metrics artificially inflated by bounty farmers.
Realistic Valuation
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Drift’s conservative launch valuation avoided the trap of excessive hype, keeping expectations grounded.
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Sufficient liquidity was injected into the initial pool, ensuring smooth market operations.
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A low fully diluted valuation (FDV) not only set Drift apart but also sparked wider industry discussions about overvalued competitors.
Drift’s success was no accident—it resulted from prioritizing product strength, fairness, and sustainability over short-term hype. As the airdrop season progresses, it’s clear that protocols aiming to replicate Drift’s success should focus on building robust foundations, fostering genuine user engagement, and maintaining realistic market valuations.
$ZEND: From Hype to Collapse—the Starknet Airdrop Failure
ZkLend ($ZEND) is now facing a severe downturn—its value has plummeted 95%, and daily trading volume struggles to exceed $400,000. This stands in stark contrast to its former $300 million market cap. More alarmingly, ZkLend’s total value locked (TVL) now exceeds twice its fully diluted valuation (FDV)—an unusual and unhealthy phenomenon in the crypto world.
So how did a project once highlighted by the Starknet narrative—a zk-rollup solution aimed at scaling Ethereum—end up in such dire straits?
Riding the Starknet Wave—but Missing the Moment
ZkLend’s concept wasn’t particularly innovative—it aimed to be a lending platform for various assets, riding on the Starknet narrative. The protocol leveraged Starknet’s momentum, positioning itself as a key player in a cross-chain liquidity ecosystem.
Premise:
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Create a mining network where users earn rewards across different protocols.
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Attract users and liquidity through rewards and cross-chain activity.
However, in practice, the platform attracted primarily "mercenary" participants—users focused solely on short-term rewards, with no commitment to the protocol’s long-term development. Instead of building a sustainable ecosystem, ZkLend became dominated by reward-seeking users, resulting in fleeting engagement and low user retention.
The Backfire of the Airdrop
ZkLend’s airdrop strategy worsened its problems. Prior to the airdrop, there was little product or brand recognition, and token distribution attracted speculators rather than real users. This critical misstep—failing to adequately vet participants—led to:
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Massive reward farming, with recipients eager to cash out quickly.
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Lack of loyalty and genuine engagement, as participants had no long-term skin in the game.
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Rapid devaluation of the token, as speculators immediately dumped their holdings.
The airdrop didn’t build user stickiness or loyalty; instead, it created a brief spike in activity that quickly faded.
A Warning for the Industry
ZkLend’s experience offers a profound lesson: while hype and airdrops can attract users, they don’t automatically create value, utility, or sustainable communities.
Key Lessons:
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Hype alone isn’t enough—building real value requires more than noise around a trending narrative.
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Airdropping to unvetted users invites speculation, destroying value, as ZkLend experienced.
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High valuations for new products carry significant risk, especially without proven use cases.
Conclusion
If maximizing profit is the goal, selling on day one is usually the optimal strategy—85% of airdropped tokens decline within months. Solana emerged as the leading blockchain for airdrops in 2024, but even after adjusting for market conditions, overall performance remained weak. Projects like WEN and JUP stood out as success stories, showing that a strategic approach can still yield solid returns.
Contrary to common belief, larger airdrops don’t always lead to dumping. One token with a 70% airdrop allocation delivered positive returns, underscoring the importance of FDV management. Overinflated FDV is a critical mistake. High FDV limits growth potential and, more importantly, causes liquidity issues—artificially high FDVs require massive liquidity to sustain, which is often unattainable. Without sufficient liquidity, airdropped tokens are vulnerable to sharp price collapses, as there isn’t enough capital to absorb sell-side pressure. Projects with realistic FDVs and solid liquidity provisioning plans are better equipped to handle post-airdrop volatility.
Liquidity is paramount. When FDV is too high, immense pressure builds. Without adequate liquidity, large-scale sell-offs crush prices—especially in airdrops, where recipients typically dump quickly. By maintaining manageable FDV and focusing on liquidity, projects can enhance stability and long-term growth potential.
In the end, airdrop success depends on more than just distribution size. FDV, liquidity, community engagement, and narrative all matter. Projects like WEN and JUP found the right balance, creating lasting value, while others with bloated FDVs and shallow liquidity failed to capture investor interest.
In a fast-moving market, many investors make quick decisions—selling on day one is often the safest move. But for those focused on long-term fundamentals, there are always high-quality projects worth holding.
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