In 2025, airdrops are no where near as common and definitely not as profitable as it was late 2024. Gone are the days where a few on-chain transactions can yield hundreds if not thousands of dollars worth of airdrops. In this article we break down what’s causing the this trend explain what is going on.
1. Airdrops Attract Farmers, Not Loyal Users
The core promise of airdrops was to put tokens in the hands of real users. In practice, they mostly reward farmers—automated accounts and sybil attackers who game eligibility criteria for profit.
- Farmers complete repetitive tasks (like testnet interactions or app clicks) using bots or multiple wallets.
- Once tokens are distributed, they sell immediately, flooding the market and crashing prices.
- These participants rarely engage with the protocol long-term. They’re not builders, not believers—just opportunists.
This creates a parasitic dynamic. The community looks active on paper, but it’s hollow. Metrics like TVL, transaction count, or user growth get inflated by non-organic activity, misleading investors and teams alike. In reality, farmed data says nothing about product health or future adoption.
2. Zero Retention: Tokens Don’t Create Sticky Users
If airdrops were meant to onboard loyal users, the data tells a different story.
- Churn is extreme. Most airdrop recipients sell within days or weeks.
- There’s almost no example of a broad, gamified airdrop leading to sustained usage.
- Retentive, high-value users almost never come through airdrop channels.
Compare the total value of tokens distributed via airdrops over the years to the actual revenue generated by top protocols. The gap is staggering. If this were traditional marketing spend, the ROI would be considered catastrophic. Billions in token value given away—yet little to no lasting impact on user behavior or protocol revenue.
The conclusion is clear: Airdrops don’t convert free users into engaged ones. They’re not a growth engine; they’re a liquidity event for sellers.
3. Airdrops Are Poorly Spent Marketing
Airdrops were once seen as a low-cost way to gain attention. But attention isn’t enough—it has to be the right kind.
- Most airdrops optimize for easily measurable but meaningless actions (e.g., “touch every button in the app”).
- This follows Goodhart’s Law: when a measure becomes a target, it ceases to be a good measure.
- Farmers optimize the system perfectly—then leave.
In today’s market, long-term value (LTV) matters more than customer acquisition cost (CAC). Projects are judged on revenue, retention, and economic sustainability—not vanity metrics. Handing out tokens to transient users doesn’t move the needle on any of these.
Even worse, airdrops dilute early supporters. Loyal holders and team members see their ownership eroded to reward people who contribute nothing and exit immediately.
4. Better Alternatives Exist: ICOs, Linear Rewards, and Revenue Sharing
If airdrops fail to put tokens in the right hands, what’s the alternative?
ICOs: Sell to Committed Buyers
- Direct token sales (like modern ICOs) let projects raise capital from aligned, long-term holders.
- Buyers pay real money, signaling conviction.
- Sales can include lockups, timeouts for flippers, or allocation rules to filter speculators.
- Oversubscribed sales give leverage to the project—rewarding good behavior, not gaming.
As one view puts it: If users are just going to sell, why not skip the middleman and sell the tokens yourself?
Linear Airdrops & Performance Rewards
Not all token distributions are equal. Pay-for-performance models work when tied to real contributions:
- Providing liquidity
- Lending/borrowing capital
- Securing networks
These “linear airdrops” (common in DeFi) align incentives. You earn based on value added—not arbitrary tasks. Protocols like top revenue generators today often succeed without broad airdrops, relying instead on economic flywheels.
Revenue Sharing: Value Accrues to Holders
With regulatory clarity improving, protocols can now activate fees and direct revenue to token holders. This creates real economic alignment—no free lunch required.
5. The 2025 Meta: Revenue Over Hype
Crypto in 2025 is in a revenue meta. Markets reward:
- Sustainable business models
- Real cash flow
- Defensible moats
Airdrops belong to a previous era—one of endless hype, zero accountability, and “number go up” at any cost. That playbook no longer works.
- Top protocols by revenue? Few did large airdrops.
- High-retention apps? Built through product, not giveaways.
- Investor diligence? Now strips out farmed metrics entirely.
The experiment has been run. The verdict: Airdrops are net negative for most projects.
The Future: Smarter Distribution, Stronger Alignment
Airdrops won’t disappear entirely. They may live on in niche forms:
- Targeted rewards for early testers
- Bounties for bug finds or content
- Retroactive grants to genuine contributors
But the era of mass, gamified, “free money” airdrops is over.
Projects now prioritize:
- Clarity: One asset, one incentive structure
- Alignment: Reward contribution, not exploitation
- Sustainability: Build revenue, not illusions
In 2025, crypto isn’t about tricking people into using your app. It’s about building something people want to use—and getting paid for it.
The death of the airdrop isn’t a loss. It’s a sign of maturity.
Michael Gu
Michael Gu, Creator of Boxmining, stared in the Blockchain space as a Bitcoin miner in 2012. Something he immediately noticed was that accurate information is hard to come by in this space. He started Boxmining in 2017 mainly as a passion project, to educate people on digital assets and share his experiences. Being based in Asia, Michael also found a huge discrepancy between digital asset trends and knowledge gap in the West and China.