The series of Airdrop tokens on Ethereum in 2021 will all be reduced by more than 50%
There were several large token airdrops on Ethereum in 2021. Despite the initial hype about the most anticipated airdrops of the year, most tokens have dropped 50% or more.
Lots of Airdrop tokens sold out
Ethereum believers are constantly receiving token airdrops, but these rewards rarely retain their value.
Some of Ethereum’s most active users were given two separate token airdrops during the holiday season, which caused a stir in the community. On Christmas Eve, OpenDAO distributed its SOS tokens after taking a snapshot of every Ethereum address that made a transaction on OpenSea. The SOS price soared during the Christmas holiday when users requested the token, quickly bringing the project’s market cap to over $ 300 million. However, data from CoinGecko shows it is currently 68.3% below its high, trading at $ 0.00000355.
Yesterday, Gas launched DAO through a token airdrop event for Ethereum users who had spent at least $ 1,559 in transaction fees. Gas DAO to say they want to “become the heartbeat and voice of active users in the Ethereum network through on- and off-chain governance”. Despite an initial uptrend in adoption, Gas DAO’s GAS is down 77.1% over the day.
While the OpenDAO and Gas DAO sales were more catastrophic than most other tokens, the drop after the airdrop wasn’t just for new projects. In fact, every major token airdropped to Ethereum users in 2021 has dropped more than 50% so far.
DeFi tokens will sink after the airdrop
The Layer 2 derivatives exchange dYdX launched its DYDX token in September, which is considered one of the largest airdrops of the year. DYDX initially traded at around $ 12 and gained momentum in the weeks following its launch. The rush helped DYDX hit a high of $ 27.86 on September 30th while ETH is trading at around $ 2,850. In the 12 weeks since then, DYDX has made 9 weekly lows while ETH has risen to new highs and is currently trading at around $ 3,668. DYDX is down 68.7% from its high.
The Ethereum Name Service also launched the token this year and caused a sensation in the community when it was introduced. After opening trade at around $ 17, ENS rose to $ 83.4 in just 2 days. The price then fell for a few days and, although rebounding to $ 75, was hit by another sell-off when the market collapsed on concerns about the Covid-Omicron strain in December.
Also, ParaSwap, a decentralized exchange aggregator that powers Ethereum, Polygon, Binance Smart Chain and Avalanche, has plummeted its market capitalization by more than 80% since the token was first introduced, despite the main reason for the switch. ParaSwap launched PSP on Nov. 15 after weeks of airdrop notices, but strict eligibility criteria excluded many loyal users of the protocol. As a result, the airdrop caused a backlash in the DeFi community.
Ribbon Finance’s RBN is also down 66.6% from its peak. The options-based profit generator suffered a wave of bad news after the token was launched, as it was discovered that one of the platform’s backers, Divergence Ventures, had used inside information to sell $ 2.5 million worth of tokens on multiple Ethereum wallets to “farm”.
One of the hardest hit tokens on the market is Ampleforth’s FORTH. Ampleforth distributed FORTH to AMPL stackers in April and rewarded some with six-figure payouts. It initially traded at a little over $ 55 and then slipped back to $ 9.6.
Although many tokens on Ethereum have fallen significantly from their highs, the market has also seen bullish price movements in recent weeks.
According to data from CoinGecko, Curve’s CRV is trading at $ 4.83, up 30% over the past 2 weeks. Convex Finance’s CVX trades at $ 41.53 after hitting an all-time high of $ 52.16 on Monday. Layer 1 altcoins like LUNA and NEAR also hit new record highs last week.
The renewed interest in NFTs in recent days has also helped the prices of blue-chip projects like CryptoPunk and Mutant Ape Yacht Club rise. A select number of NFT collectors have also received token airdrops this year, and the pricing action for many of them is more positive than DeFi projects like dYdX. Mutant Ape Yacht Club NFTs, for example, were introduced after Bored Ape owners ditched the NFT serum to transform their character into a Mutant Ape. Like Mutant Ape, serums retain their value.
While Ethereum users eagerly greet the latest wave of airdrops with more rumors for 2022, the price data shows that market interest in the token doesn’t always last beyond the initial rush.
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