Are airdrops killing the value of new projects?

[dunfida]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

But I’ve noticed a trend a lot of these projects have massive sell pressure right after the airdrop claim period. Early holders dump their free tokens, and surely the price crashes, and the project struggles to recover.

Some people argue that airdrops are great for marketing and getting more users, while others believe they create a short-term hype bubble and hurt long-term value.

No, If we do consider out on the % of allocated budget on airdrops then we can say that it cant make out that huge impact when it comes to overall price. It is what makes it that a failure on the time that it would be giving or having that negative impression in overall community. It might that getting that very small amount of allocation when it comes to supply but once those airdroppers or bounty hungers or simply the community will be having that bad impressions that would be messing up the reputation of the new project then expect that it would be having that huge impact and could lead up to demise.

It might not be that much in speaking about on the tokens given but it would be best that as a new project then you should be having that good reputation and impression when you are just that starting up.
Never ever go against with the community or making up some shady actions because once that negative impressions crawls in then it would be that bringing out that huge impact into projects success.
Always give out that good impression too because in all aspects on which community impression might sound simple but it do give out that good impact on projects success.

[Ndabagi01]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

But I’ve noticed a trend a lot of these projects have massive sell pressure right after the airdrop claim period. Early holders dump their free tokens, and surely the price crashes, and the project struggles to recover.

Some people argue that airdrops are great for marketing and getting more users, while others believe they create a short-term hype bubble and hurt long-term value.

Airdrops token been shared to participants that took part in the marketing of the project in their own right and benefit of promoting those projects. It is just that the team are not always just with them and only few of those project teams really reward their users well. Since teams knows about airdrop tokens been sold immediately they’re received by this farmers, they should stop sharing the token to them but use a stable coin to pay them for their effort in adverting the project.

In this way, the farmers gets rewarded for their efforts well and the team won’t fear dump in their tokens when lunched but may actually receive more users trooping in to buy their tokens for long term hold base on their project map if it’s going to be rewarding for them in the long run. The airdropping use to reward users that take part in advertising of the projects is gradually becoming obsolete and this project developers are beginning to shift focus here and use another method of rewarding these users, so airdropping is not really favorable like before.

[markm]

That idea of rewarding marketers / promoters in a different coin / currency seems reasonable.

Presumably the team will still need to use some of the project's capital or income to do that with but it would allow the team to be prudent in the converting of their main token into whatever they use to pay the marketers / promoters instead of taking the risk that some or many or all or almost all of the marketers / promoters will simply "dump" the token as fast as possible in a "race to the bottom" all trying to destroy the value of the token as fast as possible in order to get some reward out of it fast before all the others trash its value so much that it is hardly even worth bothering trying to "cash them out" due to their having become almost worthless.

The nice thing about platforms like Stellar is that not only is it trivially easy and cheap for anyone and everyone to issue tokens of their own but also there is built-in arbitraging as well as from the looks of it a population of arbitraging bots that constantly scan the order-books looking for opportunities, so on a platform along the lines of Stellar each and every marketer / promoter could offer a token of their own in which to be paid by airdrops, and the arbitraging would or at least should automagically route "swaps" through whichever marketer's token offers the most profitable route.

Thus for example if the Ixians decided to airdrop IXCoins on Stellar, anyone interested in obtaining some of that airdrop could simply offer to sell their own personal token (or any other token for that matter) for IXCoins at whatever price they choose, maybe even making multiple offers covering a whole range of prices.

This of course assumes their own token has value, since of course the arbitragers are out to obtain value from their arbitraging activities.

So each marketer would also offer to buy their own personal token (or whatever other token they are offering to sell for IXCoins) with something the arbitragers consider valuable. The native token of the platform, in Stellar's case Stellar Lumens (XLM) seems an obvious choice but who knows, maybe the platform also sports some so-called "stablecoins" or some other thing some arbitragers consider valuable.

Then whenever the price someone is offering to buy IXCoins at is better than other competing swap-routes, the arbitrageurs will route through those offers.

I often see, when I offer to buy one of the Galactic Milieu assets on the Stellar platform, some arbitrage bot or built-in arbitrage system notice that my action has increased the value of the thing I just bought, as measured in Stellar Lumens (XLM), enough that the arbitrageur grabs itself some profit by buying with XLM something else entirely, and maybe even another something else using that, to buy what I just bought and sell it for more Stellar Lumens (XLM) than they just started that "atomic transaction" with. They do this with one "atomic" transaction, meaning a transaction of which all the steps will complete, resulting in their arbitrage profits, or none of the steps will happen at all.

This means that each airdrop participant can choose individually how much they think IXCoin needs to be "worth" in order for them to bother participating in it, and set up the price they offer to buy IXCoins with and the token with which they are willing to buy it accordingly, and the team (and anyone else choosing to buy IXCoins or swap anything for IXCoins) can execute the "airdrop" simply by buying IXCoins using something (such as for example XLM, on the Stellar platform) that the arbitrageurs consider valuable and thus bother scanning for arbitrage routes to get.

By using this method of "airdropping" the "airdrops" would be accomplished simply by buying the project's token with something that arbitrageurs value, which seems more likely to help the token's value than to "trash" it.

Basically this moves the burden of a token getting "trashed" by "dumpers" from the team to the "airdrop" participants.

The participants get to set their own chosen value at which their attempt to participate will take effect by setting how much of their own personal "airdrop-participation token" to offer, and benefit personally from any resulting "dumping" of their personal token by being able to buy it back presumably cheaper than they in effect "sold it by offering to buy the project's token with it".


-MarkM-

[Orpichukwu]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

But I’ve noticed a trend a lot of these projects have massive sell pressure right after the airdrop claim period. Early holders dump their free tokens, and surely the price crashes, and the project struggles to recover.

Some people argue that airdrops are great for marketing and getting more users, while others believe they create a short-term hype bubble and hurt long-term value.

If the project has something good to offer, they will recover. What they do is share what they can with the airdropper and list the coin at a minimum price on the exchange, stop pumping in money, and wait for all airdrop holders to dump their tokens before they can start pushing the project. And if the project has a good use case, then airdrop participants will only drag the price down, making it cheaper for new investors to buy and hold while the project keeps on building. It's only a project that doesn't have good things to offer that airdrop participants can crash the market, and if they also don't have good money to use and provide liquidity.

[Hispo]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

But I’ve noticed a trend a lot of these projects have massive sell pressure right after the airdrop claim period. Early holders dump their free tokens, and surely the price crashes, and the project struggles to recover.

Some people argue that airdrops are great for marketing and getting more users, while others believe they create a short-term hype bubble and hurt long-term value.

Well, any strategy within the world of cryptocurrencies is going to have their advantages and their downsides, don't you think?

Also, the fact there are so many holders who dump their bags when they have the minimum chance to do so, has much to do with the historical context we are in. Back on the day when stellar lumens was a quite new project, developers and staff behind that coin offered airdrops with a value of 50 dollars (I recall), but people investing in alternative currencies were not so skeptical back then on the future of projects, Stellar Lumens continues to be fairly relevant to this day.
Something similar happened with Uniswap an their huge airdrop of 200 dollars (or was it 400?).

Now those who participate in airdrops only seek to make some money as fast as possible, disregarding the possible potential of the project.

[markm]

Back in the day Stellar only gave away 5000 Lumens (XLM) I think to each poster in their giveaway thread, whereas Ripple had given 50,000 Ripples (XRP) and also had had their script fail part-way down the thread so when they re-started it I got a second 50,000; then later they did another giveaway of maybe 1000 or 5000 can't recall which, maybe 5,000 or a few of 1000 each as I seem to recall several years later in late 2017 / early 2018 when it finally jumped over a fraction of a cent or a cent or two to nearly five dollars Canadian I had 105,000 of them I hadn't seen any point in parting with for only pennies each. 2017-2018 winter was a good time for me.

Back in those days I also imagine there were plenty of people who didn't see throwing away their Ripples and Lumens for mere pennies per unit as worthwhile, so likely I was not the only one who finally parted with them that winter.

Giveaway threads are banned here now of course, those days were long ago.

Hmm come to think maybe Lumens had a couple of giveways of 5000 as I think maybe I had 10,000 or 11,000 come the winter I parted with most of them.


-MarkM-

[SOKO-DEKE]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

But I’ve noticed a trend a lot of these projects have massive sell pressure right after the airdrop claim period. Early holders dump their free tokens, and surely the price crashes, and the project struggles to recover.

Some people argue that airdrops are great for marketing and getting more users, while others believe they create a short-term hype bubble and hurt long-term value.

Airdrop,is a marketing strategy used to create awareness for a project. Before the team decides to do an airdrop, they usually calculate the percentage of tokens that will be distributed. In my opinion, they rarely give out a percentage that would negatively affect the project.So, I don’t believe it's the airdrop participants who are always responsible for dumping the project. In fact, the main contributors to dumps are often the investors. They invest in new projects, then sell to reinvest in other projects. That’s what most investors are doing nowadays, and it's one of the main reasons why newly launched projects struggle to survive the dumping pressure in the first month after launch.

If really project teams don’t want their projects to fail and think it airdrop that causs the dumping. They have way to manage the effects of airdrops. When airdrop participants start selling, the team might buy back tokens. If the token price is rising, even airdrop recipients are less likely to sell.but the reason many tokens dump is that the project doesn’t have strong or committed investors.because they can alway control dump from airdrop side as airdrop as the token is not always much as investor token.

[JeffBrad12]

Where else you gonna get free exposure if not from airdrop. Anyway, those tokens allocated for airdrop isn't the team's to own. It's for the public, to boostrap liquidity and get the ecosystem started.
You can pay any marketing and promo team out there millions but I doubt any project would do that because with airdrop you're basically having marketing for free, just need to provide money for market maker and thats it.

There is reason why the project despite the risk of dump still keep using airdrop method, they usually know what's best for them and airdrop is the best method for them.
In the case of TIA it's dumping because retailer anticipate huge unlock that went to the VC investors where even after dump they still make 100x of their initial capital and nobody want those to be dumped on their face.

[markm]

So it seems maybe venture capitalists are the culprits dumping down the value of new projects.

Having talked to a few from time to time I noticed they tend to be all about their "exit".

Which to me is a horrible sign, an indication that they are not at all the kind of people I am typically looking for.

The rare breed I keep hoping to find more of is the generational wealth type that is not at all looking for an "exit" but rather for as sure a way as feasible to be able to expect their estate / great-grand-heirs to continue earning from the thing generation after generation, regarding its coins or tokens as akin to IOUs in that ideally one wants to buy them all back rather than wanting to dump them all onto others.

The whole "treasuries" system of the Galactic Milieu is predicated upon more and more and more of all of its assets being bought up to put into "treasuries" thus leaving ever less "out in the wild" to potentially get "dumped".

Thus the Milieu ought presumably to deprecate "venture capitalists" as basically professional "dumpers" out to destroy the value of coins and tokens by "dumping" them rather than as wise/savvy players collaborating long term to uphold the value of coins and tokens by tying them all up in one-another's treasuries, imparting "calculated value" calculated from the "treasuries" hopefully without ever getting into the highly unfortunate position of being forced to dissolve an asset to release assets from its "treasury" back into circulation to potentially be used to "dump" their values as reported by sites along the lines of CoinMarketCap and CoinGecko.


-MarkM-

[Futurexxx]

Nothing changed. That was always the case since the beginning of airdrops. Once listed, expect a hard dump.

It's just that in today's airdrop, the hype is not the same during its peak, which is why after the selling pressure period ended, most projects are unable to bounce back because only a few stay, and the built community is not that strong.

Truly, airdrop has really changed, most people including me don't sees it the way I used to see it, because like 95% of them are scam and a total waste of time, which I would say that telegram airdrop are the brain behind it.
They have disappointed their community to the extent that no body that has something going on for himself will want to be wasting his valuable time in doing airdrop that will only enrich the developers while milking it community all in the name of doing ton transaction.
Am not that surprised that most of this coin drop drastically after launch because every reasonable person understand that with the numbers of coin and token in the market today, people's capital will be spread across different coin, that's why it's mostly Bitcoin and other top recognized coin that are still surging, the rest are doing one step forward and four step backwards, as shit coin they truly are.

[jatin729]

Airdrops are not the primary reason for a project's failure; rather, the true challenges lie in the community's sentiment and the project's ongoing development post-airdrop. We’ve seen examples like ME, BLUR, X2Y2, and LooksRare, which have faced difficulties but continue to persist in the market. Success takes time, and it may require one, two, or even five years to fully materialize. Furthermore, I believe airdrops serve as a way to share revenue with early supporters while also boosting a project’s marketing and public relations efforts.

[bakasabo]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

But I’ve noticed a trend a lot of these projects have massive sell pressure right after the airdrop claim period. Early holders dump their free tokens, and surely the price crashes, and the project struggles to recover.

Some people argue that airdrops are great for marketing and getting more users, while others believe they create a short-term hype bubble and hurt long-term value.

From your post, its early buyers who kill value of a project and I its really like that. If you examine whitepaper of any project that run an airdrop and has a presale, you would notice that amount of airdropped tokens are usually a very small amount, maybe only 1% or less from all the tokens. If you look on the amount of tokens sold on presales, you would notice that the amount would be way more than 1% (10-15% could be easily). Not to mention they receive bonuses. With <1% its hard to kill value, but with 10-15% it can be done easily.

[bettercrypto]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

But I’ve noticed a trend a lot of these projects have massive sell pressure right after the airdrop claim period. Early holders dump their free tokens, and surely the price crashes, and the project struggles to recover.

Some people argue that airdrops are great for marketing and getting more users, while others believe they create a short-term hype bubble and hurt long-term value.

In this day and age, it seems there are still legitimate airdrops in the cryptocurrency field, but they are quiet and not as loud. Most of the ones I've seen are on DeFi platforms. However, there is a risk because you need to use their protocol and transfer funds to do so.

This concept and system have been around for a long time, and I've joined some that look promising. I can also pull my funds out of the protocol anytime, and so far, so good.
I'm just sharing my experience, so I can say that some are still okay.

[Wakate]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

But I’ve noticed a trend a lot of these projects have massive sell pressure right after the airdrop claim period. Early holders dump their free tokens, and surely the price crashes, and the project struggles to recover.

Some people argue that airdrops are great for marketing and getting more users, while others believe they create a short-term hype bubble and hurt long-term value.

Airdrop has nothing to do with new projects launching in the market, and I don't think it have any effect on them because investors would always put their money on projects that are going to be profitable for them, especially seeing the price going high creating green candles.
Apart from airdrops, we have presale investors can participate to make money by buying the token or getting an allocation before the token get launched in the crypto market. Project team are the one to decide the kind of pattern they want to use to launch their projects that will bring more investors.

[Odusko]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

But I’ve noticed a trend a lot of these projects have massive sell pressure right after the airdrop claim period. Early holders dump their free tokens, and surely the price crashes, and the project struggles to recover.

Some people argue that airdrops are great for marketing and getting more users, while others believe they create a short-term hype bubble and hurt long-term value.

Obviously it could kill a project if the project is not smart with handling their airdrops, I have seen alot of projects that failed in the long run all from the activities of their airdrops and bounty hunters, what happens most times is that if the bounty/airdrop have large allocation, it becomes a sink hole for the project and once the coin gets listed, the airdrop and bounty rewards in the hand of hunters get dumped in the market and before you know it, the coin price goes down without possible getting up again.

[Kavelj22]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

It's nothing compared to years ago during ICO/Airdrops boom back to 2017-2018. Today, there not that much airdrop based projects as you may notice here in altcoins board because bitcointalk is a great indicator of those projects as most of them starts here since bitcointalk is the greatest crypto community ever. We used to say plenty of projects announced everyday with many campaign managers running their services in the Bounties sub-board. Today, too long time to see a new announcement for an airdrop based project.

This is absolutely normal since community knowledge has been growth over the years to know that 99,99% of those projects are scammy schemes.

[pawanjain]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

But I’ve noticed a trend a lot of these projects have massive sell pressure right after the airdrop claim period. Early holders dump their free tokens, and surely the price crashes, and the project struggles to recover.

Some people argue that airdrops are great for marketing and getting more users, while others believe they create a short-term hype bubble and hurt long-term value.

Thats  how it has been always isn't it. Airdrops have been there way longer, almost since beginning.
The sell pressure during the listing has always been there and its just how the marketing team get their initial users.
So far I believe airdrops have been a great way for advertising a project.
If the project team delivers what they have promised then the coun will take off and surge high in price.

[gunhell16]

This depends on whether the Airdrop proceeds benefit the community. Projects often fail due to the disappointment of the community that built, supported, and contributed to the project, and ultimately not receiving the rewards they deserve.

The community that supported the project is quite different from those who invested in the project. The airdropped tokens serves as a reward for those participants who feel they might be able to bring the coin to the reach of a larger audience. But that's just what airdrops are meant for.

The real Investors are the reason for the dump not because of the community support. Once the coin is launched, they want to get their funds out as soon as possible and make back their profits. They don't care much about what happens next after that. This has always been a process in most newly launched tokens

I agree with what you're saying. Now, if you were to ask me, I'd prefer airdrops that are quiet and known by only a few people rather than potential airdrops that are swarmed
by many communities, but the reward split is minuscule.

It's better to have a seemingly non-potential airdrop with only a few participants to be eligible, but where you can get a large value once you convert the rewards
after it gets listed on one of the top exchanges in the crypto space.

[markm]

Trouble with that is not being swarmed with lots and lots of users can mean not enough daily volume to appeal to the top exchanges, and such exchanges tend to lack the patience to stick with a chosen asset through a period of doldrums even if for example one bribes them to list your asset rather than simply being a good asset good enough that some exchanges will see some point in listing it.

I expect it is mostly smaller, maybe "boutique" exchanges that pick and chose what to list instead of accepting bribes to list shit/crap.


-MarkM-

[bated]

Airdrops have become one of the most common ways for new crypto projects to gain attention, grow communities, and reward early supporters.

But I’ve noticed a trend a lot of these projects have massive sell pressure right after the airdrop claim period. Early holders dump their free tokens, and surely the price crashes, and the project struggles to recover.

Some people argue that airdrops are great for marketing and getting more users, while others believe they create a short-term hype bubble and hurt long-term value.

100% puts huge pressure post launch.  Take a look at $TICS which launched on July 31st.  Thiey tried to limit the damage by drip feeding the coins over 90 days.  The price tanked from $2 to .03 (not that I believe it was worth $2) before recovering slightly to around .08 over the last few days.