Are airdrops falling out of favor? Web3 explores new paths to sustainable value

Original title: "Airdrop token prices are crashing — Does Web3 need a new model?"

Over the past year, airdrops - tokens issued by distributing them to users for free - have gained a lot of attention in cryptocurrency. occupy a dominant position in the market.

Now, airdrops are falling out of favor due to underperforming coins and a mercenary user base. The Web3 protocol is starting to think about whether it's time to adopt a new model.

Since 2023, airdrops are everywhere. It seems like every protocol rising in Web3 has had an airdrop, from Arbitrum and Optimism to Celestia and EigenLayer. Overall, more than 30 major projects have conducted token airdrops in the past 18 months.

This surge in activity is partly overcompensation for the “crypto winter” of 2022, when a sharp decline in the market forced many Web3 projects to postpone planned token listings.

“All these projects that were backlogged from 2021, 2022 are now finally launching in the 2024 cycle,” said Tom Dunleavy, managing partner of crypto investment firm MV Global.

Airdrops attract cryptocurrency native investors with the lure of essentially free money, and high-profile airdrops attract huge hype. At the height of this year's frenzy, even a rumored airdrop was enough to lure billions of dollars into some projects.

But there’s a problem: airdrops rarely succeed. Token prices generally plummet after airdrops, and the benefits to the protocol are usually short-lived.

Has the airdrop reached its limit?

The industry has begun to realize this. For the first time this year, industry interest in airdrops is starting to wane, and protocols are starting to consider alternative ways to launch tokens.

“I think we’ve reached the peak of airdrops,” said Jonathan Joseph, co-founder of SmartFunds, a platform for tokenizing real-world assets. “We need constructive models to bring liquidity to new protocols in a way that increases returns for all relevant stakeholders.”

According to Aylo, a cryptocurrency researcher and anonymous founder of Alpha Please, 31 of the Twenty-three of the tokens distributed in the massive airdrop have lost value, sometimes significantly, since their initial listing. Excluding memecoins, only two airdrop tokens (approximately 6% of total airdrops) outperformed Bitcoin.

“Converting airdrop sales to USD or Bitcoin on launch day is almost always the right choice,” Aylo wrote in an X post.

Adding to the frustration of holders is the fact that the opaque off-site points system used to distribute airdrop tokens may be controversial in nature.

“When the airdrop came, people felt cheated because the number of points didn’t necessarily correlate with the number of tokens they received,” Joseph told Cointelegraph.

The agreement is also experiencing disappointment. Airdrops are an extremely expensive way to onboard users—often consuming 10% or more of a protocol’s total token supply—and they don’t always work.

The ongoing airdrop craze has spawned a small industry of airdrop farmers who jump from protocol to protocol in search of free tokens. Airdrop farmers often dump their tokens immediately after the airdrop, sending prices into a self-sustaining downward spiral.

“Many of these tokens have very low circulation, launching with less than 10% of the supply, and therefore are more volatile,” Dunleavy told Cointelegraph.

After completing an airdrop, projects typically experience a loss of users and total value locked (TVL, a measure of on-chain liquidity).

According to data from L2Beat, almost every Layer 2 protocol that has conducted airdrops since the beginning of 2023 has seen net TVL outflows in the subsequent weeks. One of the second-layer protocols, Blast, which distributed about a quarter of its total token supply, lost about 25% of its TVL in the first nine days after the airdrop.

Ken Deeter, a partner at Electric Capital, said, “At the time of the airdrop, especially if the points system is stopped, you may see a reset of the supply and demand mechanism among users.” Electric Capital is a cryptocurrency venture capital fund.

The impact of regulatory pressure on airdrops

Some airdrops have become more complicated due to regulatory pressure. EigenLayer, an Ethereum staking protocol, caused considerable controversy by banning participants from more than a dozen countries, including the United States, Russia, and China, from participating in its high-profile EIGEN airdrop. It also prohibits recipients from transferring tokens for at least one year.

Airdrops emerged in part as a response to the initial coin offering (ICO) boom of 2017, which prompted a crackdown from regulators who considered ICOs illegal securities offerings. To avoid a similar fate, airdrops often avoid any mention of return on investment or accumulation of value.

「这是一个如此扭曲的系统，」专注于加密货币的风险投资基金 Pantera Capital 的合伙人 Cosmo Jiang 说。「现在，如果你是一个明确没有价值的代币，那么它是合法的，而如果你是一个想要回报价值或创造价值的代币，它就是非法的。这显然与你想要达到的完全相反。」

结果是出现了大量「没有明确存在理由」的代币，Jiang 告诉 Cointelegraph。他说，唯一持久的解决方案是让行业转向具有有意义的价值累积机制的代币。

这说起来容易做起来难。

「[代币]的挑战在于它们具有双重目的，」Deeter 告诉 Cointelegraph。「一方面，它们是市场营销和用户获取，另一方面是长期协议治理。如果你只为其中一个优化，它会让你走向完全相反的方向。」

空投的替代方案

一种选择是改进现有的空投模型。Joseph 表示，协议不应该一次性大量分发代币，而应该将代币锁定在智能合约中，这些代币在一年内逐渐解锁。

Pixelverse，一个在 The Open Network (TON) 上的非同质化代币（NFT）和游戏平台，在 7 月 18 日的空投中实施了这种策略，并取得了一些成功。该项目将其代币锁定在一个质押合约中，对于早期提款的惩罚高达 90%。Pixelverse 的 PIXFI 代币在上市后的几小时内交易价格上涨了近 50%。

「解锁时间表有助于调整利益，因为你必须有选择性地说，『在那个 12 个月的期间，我对哪些资产感兴趣？』」Joseph 说。

另一种方法是完全放弃代币发行，选择其他方式来激励用户。

据知情人士透露，至少有一家初创公司正在准备推出一个去中心化市场，加密协议可以在这个市场中通过程序化方式激励用户行为。该消息人士拒绝透露协议的名称，因为它仍处于发布前阶段。

很快，价值累积型代币经济的监管障碍可能会开始减少。在美国，监管机构开始对交易型加密产品开绿灯，前总统唐纳德·特朗普正在开展一项明确的亲加密货币的总统竞选活动，现任总统乔·拜登可能被迫软化他对加密货币的立场。这可能会为协议推出对持有者更有可持续价值主张的代币打开机会。

「我看到了未来的那个世界，」Liang 说。「如果这个行业将创造真正的、可持续的价值，那么，[代币]将需要有一些价值累积。」

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