Airdrops are still success makers if we do them better

Crypto airdrops began life as a highly successful marketing tool that would drive liquidity and new users to a protocol. Their execution was easy: show up, click some buttons, and boom! Users were rewarded with free tokens. In early 2021, this was enough to create significant buzz around certain projects, and some still carry the prestige of having pulled off a “legendary” drop. Indeed, according to CoinGecko, crypto projects awarded over $26.6 billion to users via airdrops between 2020 and 2023. 

Today, airdrops remain a vital tool for community building; however, they have faced criticism from some for being supposedly hijacked by short-term opportunists, also known as airdrop farmers. Despite this criticism and the withdrawal of some new launches from the airdrop space, early-stage projects still often benefit from the same “farmers” that provided early traction, increased numbers, and generated momentum. However, once these users decide to sell their holdings, projects can find themselves struggling to support their token price, and sentiment shifts.

The evolution of airdrops: From novelty to necessity

Everything in the crypto industry evolves ten times faster when compared to the traditional tech world, and airdrops are no exception.

Early efforts, such as Auracoin in 2014, experimented with mass token distribution to kickstart network usage. Such initial, often simple, token drops aimed to generate buzz and onboard users without requiring direct financial commitment. Just a little incentive for showing interest in a protocol.

However, as the crypto landscape has developed, so has the ambition and sophistication of airdrop strategies, which have evolved from straightforward giveaways into tools for building community and liquidity. Some projects have achieved significant growth through their airdrop strategies, setting an example for what successful token distributions can achieve.

For example, Uniswap (UNI) is known for having executed the largest crypto airdrop in history by distributing approximately $6.43 billion of UNI tokens on 16 September 2020 to every wallet that had used its decentralized exchange prior to that date. A significant event, this revived interest in the airdrop model and drove user engagement. Following this airdrop, Uniswap’s total value locked (TVL) surged by more than 250%, rising from $961.9 million on 16 September 2020 to a peak of $3.4 billion later that year.

Other groundbreaking airdrops further demonstrated the potential for positive community growth. On 17 March 2022, Apecoin (APE) strategically leveraged an existing and highly engaged community and distributed up to 10,950 tokens per Bored Ape and Mutant Ape non-fungible token (NFT) holder. This strategy enhanced user engagement and expanded the ApeCoin ecosystem, with 15% of the total $APE token supply allocated to NFT holders. It also attracted new users and increased token liquidity, which led to higher trading volumes.

However, huge success always has its downsides, and some airdrops began to attract short-term profiteers interested only in turning “a fast buck” rather than being part of a growing community. Thankfully, however, these so-called airdrop farmers were and are in the minority of crypto users, most of whom enjoy being active and engaged in a protocol.  

Airdrops done right: Seamless, secure, scalable

Indeed, far from being an outdated tool, we seem to be witnessing the emergence of a new era of airdrops. The full potential of airdrops is being unlocked as projects move away from siloed efforts and embrace comprehensive growth strategies that unify the entire user experience. Sophisticated strategies like these are engineered to make the airdrop mechanism truly seamless, inherently secure, and infinitely scalable.

Consider, for example, airdrops conducted recently by projects such as Hyperliquid and Sonic Labs. Hyperliquid’s airdrop model was a community-first approach where users were encouraged to continuously trade on the platform, as airdrop participants were nominated based on their trading volume. This highlighted the engagement-based airdrop strategy that started to gain traction in late 2024. 

Similarly, Sonic’s airdrop targeted developer contributions and ecosystem involvement. The airdrop spanned multiple seasons, encouraging users to commit to the project and drive engagement.

Airdrop models that incentivize users to stay engaged and actively contribute to a project in order to earn rewards have replaced complex eligibility criteria and reward distribution processes. Crucially, such systems also implement identity authentication and anti-Sybil protocols that maintain the validity of the airdrop.

These more modern strategies have, in effect, streamlined, secured, and optimized airdrops, ensuring they reach the early supporters and active users they are designed for. 

Token distribution should be about more than a single splash, but rather cultivate vibrant, invested communities that contribute to long-term project viability. When done right, airdrops remain one of crypto’s most valuable tools for building loyal and engaged communities.