Why do DeFi projects airdrop billions of dollars to users?

Airdrop tokens have become one of the biggest attractions in DeFi, where masses of “hunters” flock to new blockchains in hopes of receiving valuable rewards.

For blockchains, launching tokens via airdrop is not only a powerful marketing tool, which increases the number of users, but also strengthens the community. This year, many blockchains have deployed airdrop tokens to users, and data shows that this strategy is still effective in increasing activity and attracting new users.

Token launches often generate strong growth spurts and maintain long-term engagement. Optimism, for example, recorded a significant increase in activity and remained at a high level after the launch of the OP token in 2022.

Notably, this effect comes not only from user incentive programs, such as rewards for transferring assets to the blockchain, but even blockchains that do not promote such campaigns, for example Starknet, have recorded significant growth in total key value (TVL) after the launch of the token.

Another case is Hyperliquid, a perpetual futures trading platform. After the launch of the HYPE token in late November 2024, the platform has seen a spike in trading, not only limited to HYPE tokens but also mainly focused on core products. This is also evident by the sharp increase in the number of new users after the airdrop.

This phenomenon can be explained in part by the massive attention the blockchain received in the first few days of the token launch, as the crypto community focused on it. However, the main reason may come from the fact that new token transactions are usually only possible on the blockchain that issues it.

In the context of today's blockchains having many similarities, users rarely change when there are no obvious differences. However, the launch of the token forces them to transfer assets to the new blockchain, thereby experiencing the products, and if they prefer, they will stick around for the long term.

A case study is Scroll, which launched the SCR token in October 2024 in close collaboration with Binance. SCR tokens can be traded immediately on Binance from launch, and Binance also receives large amounts of tokens to provide liquidity.

This makes Binance the best trading place for SCR, rather than Scroll. As a result, the volume of transactions on Scroll drops significantly after the airdrop, in contrast to other cases such as Optimism or Hyperliquid.

Other growth catalysts have similarities: users must perform operations that can only be done on that blockchain.

For example, SocialFi Friend.tech has driven the strong growth of Base, or Arbinyan has attracted large numbers of users to Arbitrum to farm NYAN tokens. However, these catalysts are not easy to replicate, and sometimes, projects produce only short-term flare-ups before collapse.

In contrast, the launch of tokens remains an important growth tool that the blockchain development team can fully control. Recently, however, two major blockchains, Move and Abstract, chose to launch tokens on other blockchains before they officially go live, missing an important opportunity to attract initial users.

While growth does not necessarily depend entirely on token airdrops, the lack of this catalyst will make the development path of blockchains more difficult.