Telegram Tap-to-Earn Tokens Hamster Kombat (HMSTR), Notcoin (NOT), Catizen (CATI) Crash After Airdrops

Several Telegram tap-to-earn tokens, including Hamster Kombat (HMSTR), Notcoin (NOT), and Catizen (CATI), have crashed since their airdrops, leading to huge losses among their players and investors.

As reported by Token Canals, HMSTR has crashed by 70% since its airdrop. Similarly, Catizen's price has dropped by 93%, and Notcoin's has fallen by 80%, valued at $25 million and $224 million, respectively.

Three main reasons may explain why these Telegram tap-to-earn tokens have crashed after their token generation event (TGE).

First, they plunged because the crypto industry has struggled to develop a viable "to earn" model, where people earn tokens that they can convert into cash. One challenge is that the developers and the participants have different goals.

In most cases, the developers typically want to create a real project that will last for a long time. That’s why many of them hire teams and spend money on research and development (R&D).

On the other hand, participants are often interested in accumulating as many tokens as possible and then selling them immediately after the token generation event happens. This is exactly what happened among Telegram tap-to-earn tokens and even Pi Network, which launched its mainnet recently.

A similar pattern occurred with play-to-earn tokens including Sandbox, Axie Infinity, Gods Unchained, and Illuvium. Move-to-earn tokens like STEPN (GMT), Sweat Economy, and Step App (FITFI).

The other main reason why tokens like Hamster Kombat, TapSwap, Notcoin, and Catizen plunged is that they all exist in the TON Blockchain.

An examination of TON's ecosystem shows that it is not as active as other popular chains like Solana and Ethereum. For example, Toncoin has a handful of decentralized exchanges, with STON, DeDust, and TONCO being the biggest ones.

The challenge is that many users don’t interact with these platforms. DeFi Llama data shows that DEX protocols handled a volume of just $3.8 million in the last 24 hours, a tiny amount considering that the DEX industry processed over $9.1 billion in assets.

While these tokens are listed in centralized exchanges, having a good presence in the decentralized exchanges is usually a good thing.

Hamster Kombat and other tap-to-earn tokens like Catizen and Notcoin crashed because of their tokenomics that favored insiders. Also, these tokens face huge unlocks over time that will dilute existing holders.

For example, HMSTR has a circulating supply of 64 billion and a total supply of 100 billion, meaning that 36 billion tokens will come online over time. Catizen has 314 million in circulating supply and 1 billion in total supply.

Further, they have dropped because of the recent crypto market crash, where most altcoins dropped by double digits from their 2024 highs. This is hopeful as it signals a potential recovery in the next crypto bull run.