{"id":172235,"date":"2024-09-26T15:18:35","date_gmt":"2024-09-26T15:18:35","guid":{"rendered":"https:\/\/crypto-economy.com\/?p=172235"},"modified":"2024-09-26T15:18:39","modified_gmt":"2024-09-26T15:18:39","slug":"shocking-study-reveals-89-of-airdrop-tokens-crash-in-value-within-90-days","status":"publish","type":"post","link":"https:\/\/crypto-economy.com\/shocking-study-reveals-89-of-airdrop-tokens-crash-in-value-within-90-days\/","title":{"rendered":"Shocking Study Reveals 89% of Airdrop Tokens Crash in Value Within 90 Days"},"content":{"rendered":"<p style=\"text-align: justify\"><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">TL;DR<\/span><\/span><\/strong><\/p>\n<ul style=\"text-align: justify\">\n<li><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">89% of airdropped tokens lose value in the first 90 days.<\/span><\/span><\/li>\n<li><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Airdrops that distribute more than 10% of the total supply show better performance.<\/span><\/span><\/li>\n<li><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Liquidity and community engagement are key to successful airdrops.<\/span><\/span><\/li>\n<\/ul>\n<hr \/>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Airdrops <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">have emerged as a popular strategy to generate interest in new projects.<\/span><\/span><\/strong><\/p>\n<p><!--more--><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">However, a <\/span><\/span><a href=\"https:\/\/keyrock.com\/airdrops-in-the-barren-desert\/\" target=\"_blank\" rel=\"noopener\"><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">recent study<\/span><\/span><\/strong><\/a><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> by <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">KeyRock<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> has revealed that <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">this distribution technique faces significant challenges.<\/span><\/span><\/strong><\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Airdrops in the Barren Desert: Surveying the traits behind 2024\u2019s 11% success rate<\/p>\n<p>Gaining and retaining crypto users is tough. Airdrops aim to attract long-term engagement but often lead to quick sell-offs. Let&#39;s see how 2024\u2019s airdrops fared. \ud83e\uddf5 <a href=\"https:\/\/t.co\/9Cx44Z7L1F\" target=\"_blank\">pic.twitter.com\/9Cx44Z7L1F<\/a><\/p>\n<p>&mdash; Keyrock \ud83d\udd11\ud83e\udea8 (@KeyrockTrading) <a href=\"https:\/\/twitter.com\/KeyrockTrading\/status\/1838867934329934309?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">September 25, 2024<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">According to the analysis, <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">a staggering 89% of airdropped tokens lose value within the first 90 days<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">, raising serious questions about <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">the effectiveness of these promotion methods.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The report highlights that while many of these tokens <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">experience initial price spikes<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">, <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">most fail to sustain their value over the long term.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The research examined <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">62 airdrops on six different blockchain networks throughout 2024<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">, and <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">the results were alarming.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Networks like <\/span><\/span><strong><a href=\"https:\/\/crypto-economy.com\/what-is-ethereum\/\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Ethereum<\/span><\/span><\/a><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> and Solana proved more resilient,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> with <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">25% of their tokens holding or increasing in value after three months.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">This resilience is largely attributed to <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">the active participation of its communities,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> which highlights <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">the importance of user engagement in the success of these initiatives.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">In contrast, other networks such as <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">BNB and Arbitrum did not show positive results,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> suggesting that <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">the choice of platform also influences the performance of the tokens.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">A key finding of the study was that <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">larger airdrops, those that distribute more than 10% of the total token supply,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> tend to <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">perform better in the long run.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">These mass distributions foster <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">a sense of ownership within the community,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> which contributes to <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">price stability and minimizes fluctuations.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">On the other hand, <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">smaller airdrops often face rapid sell-offs and significant price drops in the short term,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> showing that <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">the allure of scarcity can backfire in the long run.<\/span><\/span><\/strong><\/p>\n<h2><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter size-full wp-image-91082\" src=\"https:\/\/crypto-economy.com\/es\/\/wp-content\/uploads\/sites\/4\/2024\/09\/airdrop-crypto.jpg\" alt=\"Shocking Study Reveals 89% of Airdrop Tokens Plummet in Value in 90 Days\" width=\"825\" height=\"300\" \/><\/h2>\n<h2><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">The impact of valuations and liquidity on airdrops<\/span><\/span><\/h2>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">One critical aspect mentioned in the report is <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">the effect of inflated valuations on airdropped tokens.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Fully diluted valuations (FDVs) that are <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">excessively high can limit a project&#8217;s growth and liquidity,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> resulting in <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">a sharp price drop after launch.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Without <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">the liquidity to support these high valuations,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> many tokens are overwhelmed <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">by selling pressure,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> causing them to collapse in the market.<\/span><\/span><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">Case studies of projects like <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">$DRIFT and $ZEND illustrate the differences in airdrop outcomes.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">$DRIFT<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> achieved <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">remarkable success by rewarding its loyal users with 12% of its total token supply,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> leading to <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">a growth in its <\/span><\/span><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"><a href=\"https:\/\/crypto-economy.com\/news\/markets\/\">market<\/a> capitalization.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">In contrast, <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">$ZEND\u2019s approach attracted speculators rather than committed users,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> resulting in <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">a drastic 95% drop in the token\u2019s price.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">While airdrops remain <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">a popular marketing tool,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> their effectiveness is increasingly uncertain.<\/span><\/span><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">To maximize <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">the chances of success,<\/span><\/span><\/strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\"> projects should focus on <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">realistic valuations, foster liquidity, and cultivate genuine community engagement.<\/span><\/span><\/strong><\/p>\n<p style=\"text-align: justify\"><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">With the right approach, <\/span><\/span><strong><span style=\"vertical-align: inherit\"><span style=\"vertical-align: inherit\">airdrops can be an effective way to build a strong and sustainable user base.<\/span><\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>TL;DR 89% of airdropped tokens lose value in the first 90 days. Airdrops that distribute more than 10% of the total supply show better performance. Liquidity and community engagement are key to successful airdrops. Airdrops have emerged as a popular strategy to generate interest in new projects.<\/p>\n","protected":false},"author":33,"featured_media":172237,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9883,84,74],"tags":[4583,4620,4656,5001],"_links":{"self":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/172235"}],"collection":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/users\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/comments?post=172235"}],"version-history":[{"count":1,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/172235\/revisions"}],"predecessor-version":[{"id":172238,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/172235\/revisions\/172238"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media\/172237"}],"wp:attachment":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media?parent=172235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/categories?post=172235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/tags?post=172235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}