Airdrops have long been a favorite among crypto enthusiasts, offering a unique way for projects to reward users with free tokens. But how do airdrop recipients handle their newfound wealth when the tokens finally hit the market during a Token Generation Event (TGE)? We analyzed over 3M wallets and found out that 80% of airdrop farmers immediately sell their entire allocation at TGE. Let’s dive into the numbers and assess whether this mass liquidation is a smart strategy or a missed opportunity.
Key Findings
- 80% of airdrop farmers dumped their entire airdrop allocation at TGE.
- Only 13% of airdrop recipients do not sell any airdrop on TGE.
- Those who sell the entire airdrop profit 10 times more than those who keep all of their allocations.
- Those who sell the entire airdrop make 445% more profit than those who sell a portion of their allocations.
Airdrop Selling Status at TGE: A Dumping Frenzy
Data shows that a staggering 80% of airdrop recipients liquidate their entire allocation the moment tokens are available at TGE. On average, 86.88% of all airdrop tokens are dumped, with some projects experiencing even higher percentages. For instance, Layerzero saw 96.87% of its recipients selling tokens at TGE, while Polyhedra witnessed 92.32% selling their entire allocation.
These figures underscore a clear trend: the majority of recipients choose to sell immediately, either due to fear of token devaluation or the desire for instant liquidity.
Selling Entire Allocation at TGE: Smart Decision or Missed Opportunity?
At first glance, selling the entire airdrop allocation at TGE seems like a profitable move. The data shows that individuals who sold their entire allocation earned 445% more profit than those who sold only a portion. The numbers speak for themselves – those who cashed out immediately gained approximately 10 times more profit than those who held onto their tokens.
Long-Term Considerations: The HODL Strategy
While the numbers indicate short-term profitability, is it always wise to sell at TGE? The broader crypto market has shown that some projects gain significant value over time. Early airdrop farmers of tokens like Uniswap (UNI) and Arbitrum (ARB) who held their allocations saw exponential gains as the projects matured and established themselves within the market.
For instance, Uniswap’s airdrop recipients who held onto their tokens saw the value soar far beyond the TGE prices. The key question is whether airdrop recipients can identify which projects are worth holding onto for the long-term.
Conclusion
The data clearly shows that selling airdrop tokens at TGE has historically led to quick profits. However, for those willing to hold, the potential for even greater gains exists, especially if the project gains momentum and adoption. As always, the decision to sell or hold should be based on the strength of the project and the individual’s risk appetite.
Is selling your entire airdrop allocation at TGE a smart decision? In many cases, yes – but savvy investors know that sometimes, patience can pay off in the long run.
Methodology
We started with 10 projects with airdrop value above $100M in 2024. We then examined how airdrop farmers are handling their airdrop allocation at TGE (sell totally, sell partially, or do not sell) using Dune Analytics.
The value of sold allocation is computed by: number of sold token x TGE price (USD).
Over 3M wallets are analyzed.
The data is collected in September 2024.