Crypto airdrops are rigged against themselves, report says

Node Capital published a report titled “Airdropping: Some Facts” that found that airdrops are not risk-free promotions and offer little benefit.

A new report claims that token airdrops are expensive practices with no long-term promotional value.

The report claims that airdrops may fail for recipients and platforms without clear targets, effective communication, and a commitment to token supply.

Node Capital emphasized the integration of platform tokenomics and careful consideration of complex aspects such as bad actor filtering and compliance with relevant regulations for an airdrop to be successful.

Main takeaways

While “airdrops are not risk-free promotions,” they are “great for creating rapid wallet growth,” according to the report. However, if not implemented properly “it can be very expensive and have little long-term results.”

Airdrops can incur significant costs without providing long-term benefits, weakening their promotional value. To make a strong impact, clear goals, communication, and a commitment of at least 10% of the token supply are required.

Users may be attracted to free tokens, but platforms must give them a strong reason to stay and join a platform by measuring key metrics before, during and after the airdrop to ensure the campaign achieves the desired impact.

Airdrop launch strategy

Node Capital emphasized that successful airdrops require much more than social media and FOMO advertising. Platforms must understand their own goals and encourage token holders to use their platforms.

Platforms also need to offer real-world applications to token holders, otherwise they will face a massive sell-off after the airdrop. Effective airdrops must align with the platform’s tokenomics and use a targeted communication strategy to reach the desired audience.

Airdrop management

The report also includes recommendations for handling the complexities of an airdrop, such as filtering out bad actors and ensuring compliance with relevant regulations.

It puts emphasis on smart contracts and dedicating enough time and resources to ensure a smooth and disaster-free airdrop.

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