NFT Marketplace Airdrops Don’t Boost Overall User Numbers

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There is substantial excitement surrounding non-fungible tokens and NFT marketplaces. Past and future airdrops are designed to create value and retain customers. Unfortunately, the industry fails on that front, and things aren’t always what they seem. 

The Real NFT Marketplace Numbers

Users who buy and sell NFTs are always happy to receive free value. Interacting with popular marketplaces like Blur, X2Y2, and LooksRare has entitled enthusiasts to airdrops in the past few years. Although these tokens rarely retain value, they can offer an extra incentive. As a result, thousands of people are entitled to these new assets, and others may take an interest in the token.

That said, the Dune dashboard by J. Hackworth tells a different tale. While it indicates the airdrops are successful in terms of reach, they are terrible for user retention. Moreover, they rarely lead to NFT marketplace growth. People will claim their free tokens, sell them, and move on. There is no brand loyalty in cryptocurrency, as speculators will chase profits. Once they get what they want, they look for a new target. 

One might think that having many unique buyers benefits NFT marketplaces. For instance, Blur has 33% daily unique buyers, whereas OpenSea has over 62%. In addition, these two marketplaces represent over 98% of all NFT marketplace volume on Ethereum. However, the individual value of these wallets represents less than $1,500, resulting in a lower customer value. Even so, being active “once” at the right time can lead to eligibility for future airdrops. 

However, it quickly becomes apparent that most NFT marketplaces don’t generate much traction. Element has under 24,000 buyers to date and 0 platform fees. Zora has 6,250 users with 0 fees, and superrare has 2,900 users with $1.66 million in fees. X2Y2 has more buyers than Blur (so far), and almost three times its overall volume. However, it is rarely mentioned in NFT marketplace discussions. 

NFT Marketplace Airdrops Don’t Hold Up Well

One way these marketplaces can build momentum is by organizing an airdrop. First, however, the operators must evaluate whether that is worthwhile. Historically, these airdrops are dumped almost immediately. For example, LooksRare’s airdrop was sold by nearly 60% of recipients in quick succession. Almost 30,000 recipients bought an NFT on the platform. However, the “airdrop buy conversion rate” is just 0.24%. 

X2Y2 took a different approach. Its token airdrop was much smaller, yet its dumping was more outspoken. As a result, over 85% of recipients liquidated the token. Unfortunately, the airdrop buy conversion rate wasn’t much better at 0.33%

It appears history repeats itself with the Blur token airdrop. Over 77% of recipients have already sold the asset, although its airdrop buy conversion may be positive. More users have a “positive record” of buys and sales. However, that is only a current snapshot in time and things may change drastically once the airdrop’s excitement cools off. 

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