If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here.​

​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:

1. About 220k people were eligible for the airdrop.
2. 6.7% of the original airdropped wallets still hold UNI today which raises the question of whether airdrops retain their users.
3. 0.6% of airdropped users have increased their UNI ownership over time.
4. 30,000 users haven’t claimed their airdrop for 400 UNI tokens each. Those 12m tokens are worth about $65m & cannot be recouped.

There’s much more in the analysis that’s worth reading.

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.

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.

That implies about 5.9 years payback on marketing dollars invested. The typical private startup has a 1.4 year payback on ad spend & the average public company is at 1.6 years.

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.

​