Define dead.
Of course, airdrops are not dead because there are still quite a lot of them still happening. The fact is that even if airdrop tokens hold zero value, in terms of market USD valuation, it doesn't equate still to being dead.
An airdrop, fundamentally, is the free distribution of tokens to multiple addresses or blockchain accounts based on varying criterias. If I created a HE-based token and distributed it to all Hive accounts at 65+ reputation, I would have successfully carried out an airdrop. Whether or not the token becomes valuable let alone gets used within the network really doesn't matter much, fundamentally.
That said, when it comes to why projects engage in airdrop campaigns, this is where we have a huge flaw in the system, one that needs to be redesigned for airdrops to become effective strategies for building crypto communities.
Most emerging projects view airdrops as a marketing tool or strategy — so far I wouldn't say it's a very effective and yet it's become so central to recent project developments that it just now feels like the only thing close to “a product” that these VC-funded projects have.
Of course, I wouldn't know what the actual marketing goals of each individual project are to be able to determine if airdrops as a strategy helps them achieve that goal. But what I can do is look at the charts and know when something is not healthy, even if VCs get to profit, somehow along the line.
It is a trend that's been occasionally discussed on CT that projects are now simply building to get VC funding to create hypes, launch airdrop campaigns, manipulate the markets at launch and overtime to extract the most possible value and then simply let the project die slowly.
If you look at Binance listings in the past and in recent times you'll find that even if you were so smart to know how high a new launch will climb to predict the top, you'd still have a low probability to make a profit trading these launches.
Someone on X compiled the data on some recent 2025 listings and the win rate for the above conditions is 37%.
The analysis goes on to highlight that even holding ETH, which has been one of the worst performing assets of this cycle, would make you 81% more profitable to buying recent Binance listings.
But of course, much of recent Binance listings have little to do with airdrops so let's look at actual airdrop tokens, the top 4 in value in the last year.
Over the last 90-days, this is how the top 4 drops have performed:
Starknet(STRK) -73.41%. Initial value of airdrop at peak was $3.09 billion but current marketcap is $399.98M.
Pudgy Penguins(PENGU) -89.07%. Initial peak value of airdrop was $3.064 billion and current marketcap is $291.83M.
Notcoin(NOT) -69.92%. Initial peak value of airdrop was $2.274 billion and current marketcap is $206.94M.
Hyperliquid(HYPE) - 52.81%. Initial peak value of airdrop was $10.8 billion and current marketcap is $3.99 billion.
Note: peak airdrop values ≠ peak marketcap nor FDV — these were much higher for all projects on the list except Notcoin.
You can look at a lot more airdrop tokens out there and you'll see much worse numbers and this post would get too long to highlight everyone one of them. But the top 4 above reveals what's wrong with how teams approach airdrops and what's right.
The average person might not know the first two on the list, this shows that its airdrop event essentially failed as a marketing strategy, but the last two are much known because not only was their airdrops a huge success, the projects had actual products that gave airdrop recipients a reason to hold and buy more.
If you look at the percentage change in price you'd notice that they had the lowest losses, despite equally being large airdrops. Notcoin specifically may seem to be performing poorly but if you consider that unlike every other token on the list, it was the most “fair” airdrop in terms of % supply distributed to the community, the price performance shows that far more people are holders because it should have easily crashed up to -90%+.
Airdrops incentives should promote further usage of your products
Starknet today is a dead chain with 97% of its token holders in losses, not to mention that the project has a high concentration of whale holders.
This project specifically faced early criticism for its token distribution and today we can see how it turned out. The Starknet airdrop did not promote any further community engagement, it was one of the most greedy drops and users quickly ditched the chain.
PENGU, on the other hand, simply doesn't have a product that would make the average user want to keep their tokens or buy more.
These are things that are very essential to token airdrops otherwise why even do a drop in the first place?
The way I see it, most of these airdrops are just yield farming 2.0. The difference is that unlike yield farming in the early days of DeFi, the airdrop version is sort of time-locks yields and introduces almost no risks for farmers and sometimes no need for capital injection. All simply because the game is about creating hype for market manipulations and extraction as opposed to building what actually attracts people and capital value for the long term.
Rethinking and redesigning airdrops involves making these drops about empowering enthusiasts to influence key areas of a new valuable product, service, protocol or chain. When users can immediately perceive how much long-term value their gain from holding and using their airdrop tokens, there will be far less events of new token launches crashing over -80% after attaining billion dollar valuations.