Recent token launches have experienced significant declines, raising questions about the token generation event (TGE) model ahead of several major airdrops.
CAMP, the native token of a layer 1 blockchain focused on AI, has fallen 88% since its launch last month, while DoubleZero’s 2Z has plummeted 60% in just eight days.
Additionally, Anoma’s XAN has dropped 60% over the week. XPL, one of the year’s most talked-about projects, fell below its TGE price on Friday amid negative sentiment regarding alleged token sales by its founding team, a claim the company’s founder denied.
This price activity starkly contrasts with last year, when launches like HYPE debuted at $6.00 and increased by 400% in the following month.
Why are new tokens struggling?
Several factors contribute to the poor performance of newly launched tokens; one key issue is the excessive hype oversaturation prior to launch, leading users to cash out rather than invest more when the token is finally released.
Another factor is tokenomics; XPL’s issues have been linked to $813 million worth of “ecosystem and growth” tokens reportedly sold through market makers, creating downward pressure on prices that exceeded retail investor demand.
Are upcoming airdrops destined for failure?
In the coming months, crypto users can expect airdrops from MetaMask, OpenSea, and Monad.
These platforms are significant within their respective domains; MetaMask is widely used by millions as a crypto wallet, OpenSea has transitioned from the largest NFT marketplace to an on-chain trading platform, and Monad is a much-anticipated layer 1 blockchain set to drop its token next week.
However, if the disappointing performance of new tokens in 2025 continues, these giants may have trouble attracting demand sufficient to surpass supply, particularly for OpenSea, where users who spent large sums in fees during 2021 are likely awaiting an opportunity to cash out.
