Hello friends, let’s talk about the Airdrop Dead reality. Is it no longer worth putting in the effort? In the past, many projects came with a lot of hype and funding, like Zora, which had a lot of hype and funding but ended up being worth “peanuts.” Hyperlane cost money to participate in, but users didn’t receive anything. Gomble Games, a project that had been working for a long time with Binance backing, also turned out to be a disappointment. Many other projects are doing the same.
This raises the question: can airdrops make a comeback? Is the Airdrop Dead consensus irreversible? Is there no point in doing them anymore? I’ll explain everything with facts and figures.
Let’s start by looking at the facts. In the past, people were making $5,000 to $10,000 from projects like Arbitrum. Today, it’s hard to get even $50 from a project. Similarly, our community saw a member make $2,000 from Hyperliquid, a live proof of which I shared on Twitter. So, what has changed with projects like Zora, Hyperlane, Gomble Games, and the recent Privacy project? What is the problem?
Understanding the Problem: The Two Key Components of a Successful Airdrop
To understand the problem, we first need to understand what made past projects so successful. There are two critical components for any airdrop:
- Airdrop Percentage: How much of its total supply a project allocates for the airdrop. A good example is Arbitrum, which airdropped 11.6% of its total supply, all unlocked at TGE (Token Generation Event). Another example is Hyperliquid, which airdropped a massive 31% of its supply, again, all unlocked at TGE. This high percentage led to huge profits for those who participated.
- Low FDV Launch (Fully Diluted Valuation): This is about the project’s valuation at launch. A simple analogy: a bigger pizza cut into the same number of slices will yield bigger slices. If a project launches at a low valuation, even a decent percentage of the supply will result in a small slice of a small pie.
Let’s look at some examples:
- Good Airdrops:
- Walrus: Launched at a high valuation of nearly $3.5 billion, and despite only airdropping 4% of its supply, the high token price meant the airdrop was still very profitable.
- Arbitrum: Launched at a high valuation (~ $4 billion) and had a generous airdrop percentage (11.6%), making it a huge success.
- Hyperliquid: Launched at a high valuation (~ $25 billion) and gave away a large percentage (31%), resulting in a massive payout.
- Bad Airdrops:
- Gomble Games: Launched at a low valuation of $30 million.
- Hyperlane: Launched at an FDV of $150 million.
- Zora: Launched at a paltry $100 million FDV, despite raising $600 million in funding (meaning it sold tokens to VCs at a much higher price than its launch price).
- Privasea: Launched at a low valuation of $82 million, and to make matters worse, it locked a portion of the user’s airdrop while giving a 100% unlocked airdrop to Binance IDO participants. This highlights how both key components can be mishandled, leading to a disastrous airdrop.
The conclusion is clear: an airdrop will be good if both a high allocation percentage and a high launch valuation are in place. It will be decent if at least one of these components is strong. It will be a total failure if both are weak. The belief that airdrops are completely dead comes from these failures.
The Problem of User Psychology and “Herd Mentality”
Another major issue is user behavior. People tend to flock to projects that are easy and go viral. I’ve shared posts about projects like LayerZero that have hundreds of thousands of views and thousands of likes. Everyone jumps on the same project because it’s easy—just go to a website and click a button. But this is basic logic: where the crowd is biggest, the slice is smallest.
If everyone is participating, even a large pizza will have small slices when divided among a huge number of people. This “herd mentality” leads to disappointment when a project like LayerZero or Monad (which has over 3 million users) doesn’t provide a good airdrop, even with its strong funding. The project will have to filter so many users that the rewards will be minimal for the average person.
The Problem of Exchange and SocialFi Involvement
Exchanges and “SocialFi” projects are making things worse.
- Exchange Involvement: Projects like Privasea and Hyperlane have given significant portions of their airdrop to Binance IDO participants (who get allocations by trading alpha tokens on Binance), while airdropping a smaller, locked portion to the community that actually built the project. This is unfair; it’s robbing the community to give to an exchange. While collaborating with a big exchange is beneficial, it shouldn’t come at the expense of the community that used and supported the product.
- SocialFi: The rise of SocialFi projects like Kaito, Gibrep, and Ethos Network has created a situation where a few top users (e.g., the top 4,000) get a huge reward, while the majority who do on-chain tasks get very little. This is an unpopular opinion, but these SocialFi tools have monopolized the airdrop ecosystem. The project should focus on rewarding users who actually test the network, not just those who flatter them on Twitter. There’s a clear hypocrisy here: a top influencer with a large following can easily get a code, but a community member with 100 followers has to work for months without getting one.
Airdrops Are Not Dead: The Solution
The notion that the Airdrop Dead narrative is a complete myth. The money is still being distributed, but it’s not reaching the average user. The projects have rerouted the airdrop flow from the community to exchanges, top influencers, and insiders. We need to redirect it back.
So, how do we adapt?
- Be Early: You need to get in early on projects. For example, when Sussent announced its open spot, I posted about it at 1:23 AM. At that time, people were even sharing codes in the comments. Now, people are scrambling for a code. Being early is a key advantage.
- Manage Expectations: Work on projects where there is a lot of crowd, but keep your expectations low. The more people there are, the smaller your share will be.
- Find Your Edge: It’s no longer enough to just do four tasks and expect to make thousands of dollars. You have to find a niche and put in the grind. For example, projects are now rewarding those who contribute socially or have specific Discord roles. You have to prove your value to the project.
- Focus on the Right Projects:
- Be wary of projects that offer more than 10% referral points, as they often have low-quality airdrops.
- Focus on projects that have early roles and limited spots, as these offer a higher chance of a significant reward.
- Forget about projects that are already at TGE. If something lands in your wallet, great; if not, it shouldn’t be a disappointment.
In conclusion, airdrops are not dead; they have simply changed. When the wind changes direction, you either fight it or you ride it. We must adapt to the new reality by being early, managing expectations, and finding our edge to prove our value to projects.
