When should you sell the airdropped tokens you received?
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When should you sell the airdropped tokens you received?
Lock in profits when you can make money—no one has ever gone bankrupt by securing their gains.
Navigating Web3 tides with focused insightsAuthor: Sly Odogwu
Translation: Luffy, Foresight News
Some sold PROVE at $0.60, others at $1.30, while some are still holding, hesitating over when to sell.
Most airdrop recipients face a dilemma: they don't know when to sell their tokens. Some sell too early and later regret it; others hold all the way until the token loses all value and is eventually forgotten by the market.
To determine when to sell an airdropped token, you need to consider several key factors. There's no 100% accurate formula, but the following framework can guide your decision-making. It may not guarantee absolute correctness, but it can help clarify your thinking.
Market Valuation
Every project has its own market valuation—its overall worth. To assess whether a valuation is high or low, compare the fully diluted valuation (FDV) or market cap (MC) of similar projects.
For example, if your airdropped token comes from a Layer1, Layer2, decentralized exchange (DEX), or cross-chain bridge project, check the FDV/MC of other projects in the same category.
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If the project’s valuation is significantly higher than its peers, proceed with caution (likely a bubble);
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If the valuation appears low, there may still be room for growth.
Some projects launch with extremely high or low FDVs. By comparing them to similar projects, you can better judge valuation fairness and make more informed decisions.
I made this mistake with W token: I didn’t do proper valuation comparisons and held on until the price crashed to its lowest point.
Funding Size
A project’s funding size matters because it determines the level of liquidity it can provide. Part of the funds raised is typically used to establish initial liquidity; the larger the funding, the deeper the liquidity usually is.
The valuation logic differs greatly between a project launching with $2 million in liquidity versus one with $20 million. Liquidity directly affects token volatility and trading volume: shallow liquidity leads to wild price swings, while deep liquidity keeps prices relatively stable.
In addition, pay attention to the "initial circulating supply": if a large number of tokens will unlock soon (e.g., team or VC holdings), the risk of massive sell-offs increases.
Investors / Backers
Who backs the project? Are they reputable, community-focused institutions, or capital-driven actors aiming to exit quickly? Generally, credible long-term VCs and community-oriented investors add credibility to a project.
Oftentimes, backers also serve as advisors since they hold equity in the project. However, even high-profile VC-backed projects can suffer token dumps due to poor tokenomic advice from supporters.
Many popular projects have underperformed post-airdrop or seen their token prices collapse due to misguided guidance from backers. Therefore, review the track record of these backers’ previous investments for reference.
Market Sentiment
Closely monitor social platforms (such as X) to gauge public opinion about the token. But the key is learning to distinguish truth from noise—identifying genuine criticism or objective trend analysis versus paid promotional content.
You must filter out shills and biased fear-mongering (FUD) to find authentic analysis. Also, sector narratives matter: if the airdropped project aligns with a trending sector (e.g., AI, RWA, meme coins, L2), the token typically has stronger upward momentum.
Tokenomics
By analyzing tokenomics, you can understand the token distribution logic. Focus on the following:
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Token holder structure: What percentage is held by the team, VCs, and the community?
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Initial circulating supply: What portion of total tokens is actually circulating at launch?
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Distribution ratios: How are tokens allocated among community, VCs, team, etc.?
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Unlock schedule: When and how much do VC and team holdings unlock? Are community airdrop tokens subject to vesting?
Unlock schedules directly impact price movements: large unlocks often mean increased selling pressure and higher risk of price drops; conversely, gradual unlocks support price stability.
Team
The team makes core project decisions—their vision and capability directly shape the project’s trajectory. Consider:
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Does the team value the community? Do they listen to user feedback?
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Do they have prior project experience or proven successes?
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Are they genuinely building a valuable product, or just looking to cash out quickly?
No matter how thorough your analysis, a single decision by the team can lead to success or failure. Moreover, the team’s commitment level indirectly reflects the token’s long-term potential. Be cautious if the team frequently changes or shifts focus.
Most importantly: does the team have potential on-chain malicious intent, such as fund misappropriation or price manipulation?
Technology and Utility
Technical strength and product utility determine real demand for the token:
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If the project brings technological innovation and solves real problems (e.g., improving transaction efficiency, reducing costs), the token has sustainable demand;
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If the technology is weak and merely copies other projects, consider selling early to avoid getting trapped.
Centralized Exchange Listings
Watch for announcements about listings on centralized exchanges, but note: we're past the era where "listing on Binance guarantees a price surge." Currently, Upbit is one of the few exchanges that can drive meaningful price increases—many airdropped tokens see a rally after listing on Upbit.
Therefore, if your airdropped token is confirmed for Upbit listing, consider selling during the "Upbit listing hype phase" or when liquidity is sufficient.
Macro Market Environment
Even the best projects or airdrops struggle to perform well during bear markets or periods of broad market weakness:
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Bull markets: overall sentiment is optimistic, offering greater upside potential—consider holding longer;
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Bear markets: selling pressure is high, so consider taking profits early and securing gains.
Macro market sentiment directly impacts individual token performance. Understanding whether the current market is in a bull or bear phase is a critical prerequisite for decision-making.
Final Advice
You must make decisive choices and stick to your judgment. The above framework is meant to support more rational analysis—not serve as an absolute rule.
When making decisions, prioritize eliminating emotional influence; greed and fear often lead to poor choices. Ultimately, your firm conviction should be the most important reference.
Use these factors as a decision framework, but remember: lock in profits when the opportunity arises. After all, no one ever went broke by taking profits.
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