Original article: "In order to find out whether it is worth it, I analyzed 414 cryptocurrency airdrops"
Editor: RR
In this article, I will share my analysis of 414 crypto airdrops. I wanted to know if we can make money from airdrops.
data set
The dataset I used is: https://coinmarketcap.com/airdrop/
At the time of this analysis, there were 414 cryptocurrency airdrops from 2021 to 2022. To complete the analysis, I also used historical and current price data for cryptocurrency projects from Coinmarketcap and Coingecko.
Crypto airdrop participants and winners
Generally speaking, the chances of winning in most of the projects are very small. In fact, only 39 of the 414 projects have a chance of winning greater than 10%.
The chart below shows the number of participants and winners for each airdrop in absolute terms.
When airdrops are broken down into NFT and non-NFT, we get some interesting insights.
Non-NFT Cryptocurrency Airdrops
Average number of participants: 1.17 million
Median number of participants: 247,000
Average number of winners: 7,000
Median number of winners: 2,000
The average chance of winning is about 8%
NFT Airdrops
Average number of participants: 3.24 million
Median number of participants: 273,000
Average number of winners: 5,600
Median number of winners: 1,000
Average chance of winning ~ 2%
Bottom line: those who participate in NFT airdrops have a much lower chance of winning on average.
OK, but can you really get rich by participating in cryptocurrency airdrops?
Let’s find out!
Are Crypto Airdrops Worth It?
If we divide the total number of airdropped coins or tokens by the number of winners and multiply by the price of the coin or token, we will know the value of the airdrop on a given day.
In the calculations below, I used a sample of 414 cryptocurrency airdrops.
The boxplot chart above shows the following information (I removed some outliers to make the chart more readable):
The value of the last day of the crypto airdrop phase
To do this, I checked the prices of about 90 randomly selected airdrops on the last day of the airdrop phase, so there is a margin of error of a few percentage points.
Average value of airdrop: $33
Median: $9.55
Peak value
Most airdrops have a peak price that is significantly higher than the price on the last day of the airdrop period. When this peak occurs depends on various factors, such as awareness and popularity or general market conditions.
Average value of airdrop: $86
Median: $16.9
Value in November 2022
I also looked at current prices as of early November 2022 at the time of writing this research.
Average value of airdrop: $5
Median: 0.8 USD
There are a few things to sort out here. Generally speaking, the price performance of cryptocurrency airdrops follows a well-known pattern: most cryptocurrency projects experience a price surge after the airdrop ends (on average 300%), followed by a sustained price decline (on average -74%).
Specifically, on the last day of the airdrop period, your crypto airdrop would have netted you $33 on average, with a peak of $86, but is currently worth just $5.
There are some extreme outliers. In some cases, you can make hundreds of dollars, while some airdrops are worth only pennies.
During the analysis, I also encountered some unexpected results.
The more people participate in an airdrop (this does not mean winners, just participants), the higher the value of the airdrop is (moderate correlation). I consider a large number of participants an indicator of a strong interest in the project, so this has a positive impact on the future price development of the project.
Summarize
I came to the following conclusions from my analysis:
You need to be lucky to get a crypto airdrop - to increase your chances of winning, you should participate in as many as possible. The odds of winning an NFT airdrop are much lower. The average airdrop is worth a few dollars. While there are a few exceptions, the general rule is that if you really want to make money from it, you should participate in more airdrops. Most airdrops will reach a higher price peak after the airdrop period is over. However, catching the peak is difficult. If you miss the best time to sell, your airdrop will become less and less valuable over time - so sell it early. If a large number of people participate in an airdrop, it may be a sign that the project will perform well in the future.