Airdrops: Quick Sales Yield Higher Profits, Data Shows

A recent study by Messari reveals that selling airdrops can be substantially more profitable than holding them. Analysis of 10 significant Ethereum airdrops shows that selling each airdrop a week after receiving them would have yielded twice the returns (112.5%) compared to holding them. The study posits that profit-seeking users should consider selling airdrops promptly, challenging the belief that airdrops are intended for community stewardship.

Airdrops: Sell or Hold? Data Reveals Profitability of Quick Sales

A recent report by Messari data scientist Yule Andrade has shed light on the financial implications of holding versus selling airdrops, revealing that profit-driven users would have reaped substantial gains by promptly selling them.

Andrade's dashboard analyzed the performance of the top ten Ethereum airdrops, including dYdX, Uniswap, and Ethereum Name Service (ENS). The data indicates that selling these airdrops within a week of receipt would have yielded returns approximately double those of holding them until March 10, 2023.

Specifically, a user who received the median number of tokens for each airdrop and sold them promptly would have netted a profit of $108,393, while a portfolio holding the airdrops until March 10 would have been valued at $30,349.

Andrade's portfolio analysis also revealed a decline in returns as the duration between airdrop receipt and sale increased. This finding challenges the notion that airdrops are primarily intended for community stewardship.

Brantly Millegan, former director of operations at ENS, despite his involvement in controversies, has emphasized the responsibility associated with airdrops. However, the financial incentives provided by immediate sale may make it challenging to persuade users to prioritize both responsibility and portfolio performance.

It is important to note that not all airdrops have performed worse than their initial value on March 10. Uniswap's UNI tokens, for instance, would have been worth $3,686 if held until March 10, an increase from their $1,959 valuation a week after their September 16 airdrop.

Other airdrops, such as Gitcoin's GTC and 1inch's INCH, have also experienced modest gains since their distribution dates. Additionally, airdrops can provide benefits beyond financial gains, such as ETH fees for staking LOOKS tokens.

It is crucial to recognize the broader market context, which has seen a 20% decline in crypto prices over the past 90 days. This decline has disproportionately affected airdrop holders. While the data suggests that selling airdrops promptly may have been more profitable in the short term, the long-term outlook remains uncertain.