Despite billions in tokens airdropped since 2017, data shows that activity drops back to pre-airdrop levels within weeks, as long-term value rarely sticks.<\/p>\n
Airdrops<\/a> are Web3\u2019s go-to growth hack, flooding wallets with billions of dollars in tokens to onboard new users, but the data shows most of that hype fades in just 90 days.<\/p>\n According to a report from DappRadar, projects across DeFi<\/a>, NFTs<\/a>, and blockchain gaming<\/a> have handed out more than $20 billion in tokens since 2017, including $4.5 billion in 2023 alone. <\/p>\n The effect was immediate as Layer-2 chain Arbitrum<\/a>, for instance, processed 2.5 million daily transactions at launch, while NFT marketplace Blur grabbed over 70% of NFT trading volume overnight.<\/p>\n But the hype doesn\u2019t seem to stick. On average, activity drops back to 20-40% above pre-airdrop levels within weeks, and about 88% of airdropped tokens lose value within three months, showing that while airdrops succeed as marketing events, they \u201crarely secure long-term token strength,\u201d DappRadar\u2019s analyst Sara Gherghelas wrote in a Sept. 18 research report<\/a>.<\/p>\n \u201cAirdrops are unmatched in their ability to accelerate user acquisition, but long-term retention depends on product-market fit,\u201d Gherghelas added.<\/p>\n Haseeb Qureshi, managing partner of crypto VC firm Dragonfly Capital, calls airdrops \u201cdumb,\u201d arguing in a Sept. 15 post on X<\/a> that projects \u201cspend months attracting farmers who generate artificial activity, only to watch those same farmers dump tokens immediately after TGE.\u201d<\/p>\n Instead of handing out free tokens, Qureshi says projects should adopt \u201cmeta-incentives,\u201d somewhat like a traditional credit score, where airdrops \u201cincorporate how users behaved in previous airdrops.\u201d<\/p>\n \u201cIf users know future protocols will see this Holder Score and incorporate it into their own airdrops, those users will adjust their behavior today,\u201d Qureshi explains.<\/p>\n But big projects still favor airdrops to reward long-term supporters. For example, Jesse Pollak, founder of Coinbase\u2019s Base network, recently hinted<\/a> at a potential native token launch, sparking speculation about an airdrop for the network\u2019s active users.<\/p>\n Consensys-backed Layer 1 Linea also launched its token via airdrop, even though a lot of recipients sold immediately<\/a>, partly because the token didn\u2019t have much use at launch, which pushed the price down more than 50%.<\/p>\n\u2018Holder Scores\u2019<\/h2>\n