Solana, the high-speed blockchain platform known for its smart contracts, has been on the agenda recently with its airdrop events. It has seen a rise in airdrops, which are distributions of free tokens to encourage user participation. However, this trend appears to be losing momentum, with some projects experiencing significant drops in value locked (TVL) and token prices following airdrops.
Momentum has waned on the Solana platform
Solana platform, cryptokoin.com As we reported, airdrops were on the agenda. However, this interest has ended in recent weeks. Parcl, a decentralized betting platform built on Solana, is a prime example of this. Since the airdrop snapshot on April 3, the project has witnessed a massive withdrawal. This led to a staggering 40% drop in TVL in just two weeks. DefiLlama data points to a decline in Parcl’s TVL. Data shows that it fell from $184.5 million to $110.69 million at the time of this writing.
This release coincides with the airdrop of 80 million PRCL tokens, Parcl’s native coin. According to CoinMarketCap data, the token price, which was initially valued at $0.8255, quickly dropped to $0.45. Although there has been a slight rebound to its current price of $0.5294, the airdrop appears to have triggered sales among users.
There is also a decline in Wormhole and Tensor
Parcl is not alone in this post-airdrop collapse. Other Solana-based tokens such as Wormhole’s W and Tensor’s TNSR also suffered losses. Launched on April 3, W has lost a massive 56.4% of its value. On the other hand, the NFT platform’s token, TNSR, has lost half of its value since its airdrop.
This trend raises questions about the sustainability of airdrops as a user acquisition strategy. While they initially attracted participants, the long-term value proposition appears weak. Significant price drops following airdrops indicate a lack of real user interest and highlight the potential for token dumping.
Airdrop madness continues in Solana
Despite these recent setbacks, the airdrop craze continues in Solana. Decentralized exchanges such as Drift and Zeta Markets have announced upcoming airdrops of governance tokens DRIFT and ZETA respectively. This persistence indicates belief in the power of airdrops to attract users despite concerns about their effectiveness
Solana himself has faced additional challenges in recent weeks. The network experienced significant congestion caused by suspicious spam transactions. While developers have been rolling out updates to resolve these issues, the incident has added another layer of uncertainty to the overall ecosystem. Moreover, the general crisis in the crypto market did not help Solana’s cause. The GMCI 30 index, which represents the top 30 cryptocurrencies, fell 13.79% last week as recent geopolitical tensions in the Middle East increased investors’ risk aversion.
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