Solana-based Airdrops Have This Unique Performance Pattern

by Bruce Ng
By Bruce Ng

I introduced you to the world of airdrops last week. 

To recap, airdrops are a marketing tool at heart. The goal of one is to raise awareness for a project or network by gifting free tokens, usually to community members.  

However, you’ll remember from our last discussion that there’s more to an airdrop than just getting some free crypto. 

Indeed, you can also learn a lot about a project by the price action of its token immediately after its airdrop event. 

In my research, I’ve found an interesting pattern that has borne out a few times now. 

The key to this pattern? All the airdrops in question have been for tokens built on the latest crypto darling, the Solana (SOL, “B”) network. 

SOL’s price exploded over the past year. From its lows of $14 in mid-2023, it has surged to $103 at the time of writing. 

Solana price action from September 2023 through January 2024. Source: CoinGecko. Click here to see full-sized image.

 

That’s an incredible 635% gain in less than a year!

But that’s just the token for the base chain. The projects built on the Solana network have also performed incredibly well. Their tokens have, as well … including the ones launched in airdrop events. 

Indeed, every airdrop on the Solana network since October 2023 has resulted in robust price appreciation for that token immediately after. 

And to be clear, I am only talking about airdrops on the Solana network. I have yet to see this same pattern across other networks.

Here are the three latest ones:

Coin 1: BONK

At the end of 2022, the FTX debacle was in full swing. Due to its connection to FTX, the Solana community was in the depths of despair. 

It was in this bearish environment, on Dec. 25, 2022, that the memecoin Bonk (BONK, Not Yet Rated) was airdropped to the Solana community. This was done to revitalize interest in the Solana ecosystem and reward contributors (like project developers) who stuck around in the downturn. 

And it worked.

According to data from Solscan, a tool that scans the Solana ecosystem, more than 127,205 wallet addresses held BONK coins by Jan 12. 2023. That was 99.9% higher than the Dec. 25, 2022, count. 

That renewed interest was reflected in its price. In the first week after the airdrop, BONK’s price soared by over 5,000%!

After that, the price stabilized and consolidated for a while. But BONK wasn’t done. In that time, BONK rose to become the No. 1 memecoin on the Solana network. 

Then, it got its next big price catalyst: It posted over 10x gains from October 2023 to December 2023, when it was listed on Coinbase and Binance. This made BONK accessible to investors in the U.S. and all over the world.

Bonk’s price action over the past year. Source: CoinGecko. Click here to see full-sized image.

 

That’s when BONK finally entered the $1 billion market cap club

Since then, its price has retraced. Still, I see it going higher. 

Remember, BONK is a memecoin, so there are no fundamentals or use case narrative to fuel its momentum. All this price action is just community support. 

Its performance— from its bear market origins all the way to now trading on centralized exchanges — suggests to me that, if the current bull run continues ... 

BONK’s market cap can achieve the peak heights other memecoins like Shiba Inu (SHIB, “D”) and Dogecoin (DOGE, “C+”) reached in the last bull market!

And if you’re wondering, that was $40 billion and $80 billion in market cap for SHIB and DOGE, respectively. 

Coin 2: JTO

JTO/USD. Source: Binance. Click here to see full-sized image.

 

One of the big narratives for 2023 was liquid staking. 

Essentially, liquid staking allows you to provide crypto tokens to a platform in return for a yield. 

So far, that’s pretty standard staking. But traditional staking means you can’t use your loaned cryptos elsewhere. That liquidity is no longer available to you. 

Liquid staking changes that by giving you an IOU token — called a liquid staking token, or LST — with each pegged to the value of your loaned crypto. 

So for the value you put in, you get out the exact same value in the form of the LST. 

You’re then able to use those LSTs as you would any other crypto asset. 

One of the most popular liquid staking platforms is called Lido (LDO) and it is on the Ethereum (ETH, “B+”) network. 

Jito (JTO, Not Yet Rated) is Solana’s version.  

It’s a liquid staking platform that allows you to deposit SOL tokens in exchange for yield and an LST. You can then loan, trade or even stake that LST as you wish. 

Like BONK, JTO is also an airdrop coin on the Solana network. 

And, like BONK, JTO’s chart posted a green candle upon listing. And, yes, green is good!

The price was $2.43 on Dec. 7, 2023, when it dropped. Two days later, JTO peaked at $4.40 for an impressive 81% hike.

Its price has pulled back with the broad market since. With a recent price near $1.30, I believe it is now in an accumulation range as it is poised for its next leg up. 

That’s because the popular liquid staking narrative isn’t going anywhere. And Jito is the most popular liquid staking solution on Solana. 

And as Solana continues to dominate the Layer-1 narrative in crypto, JTO is set to do well. 

Coin 3: PYTH 

To understand the next Solana airdrop, Pyth (PYTH, Not Yet Rated), let’s talk first about something called oracle solutions.

Normally, a smart contract on a blockchain can only operate based on information that exists on that blockchain. 

But oracles improve smart contract functionality by pulling external data — like price information from other blockchains — into the ecosystem. That allows the smart contracts on that network to do ever more complicated functions.

Pyth is an oracle solution. It’s token PYTH was launched as an airdrop on Dec. 21, 2023, and it demonstrated a similar price performance as that of JTO and BONK.

Specifically, it posted a giant green (again, bullish) candle upon listing. PYTH hit a peak shortly after, then retraced into an accumulation range. 

PYTH/USD Source:  Binance. Click here to see full-sized image.

 

There are other oracle solutions currently on the market. But Pyth has the advantage of benefiting from Solana’s success.  

I believe it will piggyback on Solana’s growth and bullish price action in the near term before it can expand. We can see that the price action of PYTH is very similar to that of JTO’s. This means it is now in an accumulation range, ready for its next leg up. 

New Coins Yet to Launch

Now that you know the pattern, I urge you to observe future Solana network airdrops and see for yourself whether it repeats.

But remember, this pattern only tracks the near-term price immediately post-airdrop. It isn’t a guarantee of long-term success.

So, how can you determine whether a new token will go the distance?

Well, a good place to start is studying the project behind the token.

If the project is new and untested, you’ll have less data to work with. But if the project already works and offers an in-demand utility, then you’ll have a place to start your research.

And indeed, Solana has a host of working projects that have yet to launch a coin. Meaning there are more potential opportunities like the ones above. Three of these are: 

  1. Drift Protocol, a decentralized exchange aggregator
     
  2. Tensor, an NFT marketplace
     
  3. Parcl, a decentralized exchange that allows you to speculate on real estate prices

I think you’ll agree, Solana and its ecosystem are fascinating.

As the bull market continues to gain momentum, expect to hear a lot more about Solana and the new projects and airdrops on that network.

I’ll bring you updates as they happen. If you’re interested in following these closer on your own, I suggest following their social media pages for the most up-to-date info straight from the horses’ mouths.

Best,

Dr. Bruce Ng

About the Contributor

Dr. Bruce Ng is a literal rocket scientist who was among the first to write about DeFi. Today he applies the same mathematics and scientific methods to the crypto space to discover the world’s most promising, and potentially most profitable, altcoins.

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