The Uniswap Token Launch : Tokens as CAC Part II
Airdrops may be one of the most prevalent forms of marketing in web3. Airdrops reward users who have helped the project & generate awareness of the token by depositing free tokens into their wallets.
Recently, Dune Analytics published an analysis of the Uniswap UNI token airdrop.
Some background on the UNI airdrop: To be eligible, users must have transacted on Uniswap before September 1, 2020. Uniswap distributed 150m UNI tokens - about half went to insiders (investors, employees, etc.). Uniswap gave 400 tokens to each eligible user, worth about $1200 at the time. Today, UNI tokens’ market cap tops $5b.
Dune’s analysis reveals that airdrops reach many people but may not drive long-term behavior:
- About 220k people were eligible for the airdrop.
- 6.7% of the original airdropped wallets still hold UNI today which raises the question of whether airdrops retain their users.
- 0.6% of airdropped users have increased their UNI ownership over time.
- 30,000 users haven’t claimed their airdrop for 400 UNI tokens each. Those 12m tokens are worth about $65m & cannot be recouped.
Marketers bet loss-leader campaigns like airdrops generate more revenue than the cost of the campaign. Used “dollar airdrops” PayPal deposited $10 into each new user’s account when registering in their first growth phase.
Since data is public on the blockchain, we can estimate the effectiveness of this airdrop.
|Cumulative Trading Fees||$1205m|
|Value of Trading Fees from Airdrop Users||$208m|
|Payback Period||4.2 years|
With about 88m tokens distributed at a price of roughly $4, the campaign cost $351m. Airdropped users generated about 17% of cumulative trading fees since the September 2020 airdrop or $208m in about 2 years.
|Segment||Payback Period in Years||Multiple|
|Private Software Startups||1.4||1.0|
|Public Software Companies||1.6||1.2|
|Uni Airdrop Annualized||11.8||8.4|
|Uni Airdrop Cumulative||5.9||4.2|
In 2021, I estimated that airdrops were 4-7x as expensive as spending venture dollars on sales & marketing. This second analysis shows that Uniswap’s token launch falls within those bounds.
Both of these analyses reaffirm airdrops - as structured today - remain an inefficient marketing channel for web3 startups.
Where might airdrops go from here? Look for an upcoming post on the topic.