Like LayerZero did explain In the blog post, airdrops are a way to fairly distribute token supply while also inspiring the community to build issuance protocols.
But automated airdrop farming and Sybil* campaigns are now so effective at collecting free tokens that there is too much supply for parties with little regard for the long-term success of the project.
So, blockchain connector LayerZero really wants users to know the token launch isn’t just about the airdrop. The project’s new token is ZRO, used to reward donations of $0.1 in cryptocurrency to develop this layer 1 Ethereum. LayerZero Foundation said it will accept all donations up to $10 million.
The team’s intentions seem clear but the market doesn’t seem to care about that. ZRO without airdrop has decreased by 30% since its launch on June 20.
However, despite all the problems, issuing tokens in the form of airdrops is still really popular. Of the current top 200 cryptocurrencies by market capitalization, about 50 have been launched since January 2022.
Source: CoinGecKo
Half of those tokens were initially distributed via airdrop, worth between 1.5% and 20% of the total supply. If we remove memecoins, Runes, and Ordinals, 7 of the remaining 13 airdrop tokens have increased in price since launch.
The success rate is not bad, although the average profit so far is -30%.
It’s difficult to accurately compare token airdrops as they are often dissimilar, with all sorts of amenities and token system features.
But comparing the performance of airdropped tokens with other types of token creation events like launchpads and ICOs shows that it can be very difficult to launch a bullish token.
Of the 15 tokens launched in ways other than airdrops over the past 2.5 years, 7 tokens maintained a value above their initial trading price, with an average return of -29%. This number is actually almost the same as the airdrop.
APE lost 90% of its value since drop | Source: CoinGecKo
Perhaps the market will fall in love with exchange launchpads and launchpools again.
Automated market maker Aerodrome Finance’s AERO token on Base and real-world asset platform Ondo’s native cryptocurrency ONDO are both clear exceptions in this analysis. AERO has grown 10x and ONDO 5x since first hitting the market via direct token launch, even after recent healthy corrections.
In the case of Aero, the token was released amid a second major wave on Base in April, including frenzied memecoin markets. That moment certainly didn’t hurt.
Meanwhile, Coinbase-backed Ondo benefits from the real-world asset boom, delivering positive price action for the project’s governance token. The project’s OUSG tokenized securities product began purchasing $95 million of BlackRock’s onchain money market fund BUIDL to help smooth buybacks earlier this year.
Source: CoinGecKo
Bittensor and Echelon Prime are other standouts, both up nearly 200% since launch without airdrops.
On the other hand, Worldcoin Orb actually offers a fix for many of the problems plaguing airdrops: Only allowing WorldID holders to receive tokens, relying on “human proof” from biometrics to avoid Sybil bot.
Overall, Worldcoin Orb does not seem to be well received so far and we may have to wait until the next cycle.
*Sybil airdrop farmer is a term commonly used to refer to users or bots who automatically create many fake accounts to participate in airdrop programs to receive many free tokens or incentives from projects. However, this action has always been criticized for reducing the actual value of the airdrop to the community by creating unfairness and receiving more airdrop tokens than they should be entitled to.
Minh Anh
According to Blockworks
