March 11, 2024

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Download the PDF Version Here

25.03.11_Dragonfly’s State of Airdrops Report 2025_Dragonfly Report.pdf

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Important disclaimers located at the end of the report

Funds managed by Dragonfly may be invested in some of the tokens and protocols mentioned in this report. This report should not form the basis for making any investment decision, nor be construed as an investment recommendation.

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Executive Summary

OUR FINDINGS ON AIRDROPS

AIRDROPS ARE STRATEGIC TOOLS FOR BLOCKCHAIN ADOPTION AND VALUE DISTRIBUTION

Airdrops, distributing tokens directly to wallet addresses, often for free, serve as a strategic tool for blockchain projects to enhance user engagement, decentralize token distribution, and reward community loyalty. This analysis explores the impact of airdrops within the blockchain ecosystem, offering insights on how they contribute to the broader goals of value creation and distribution in emerging digital economies.

We analyzed data from over 12 airdrops (11 geoblocked airdrops and 1 non-geoblocked airdrop as a control) that conducted airdrops between 2019 and 2023 to determine the economic impact of having blocked U.S. users from claiming tokens.

Key Findings:

Number of U.S. Persons Affected by Geoblocking: We estimate that between 920 thousand and 5.2 million active U.S. users (5–10% of an estimated 18.4 to 52.3 million cryptocurrency holders in the U.S.) were affected by geoblocking policies in general in 2024. These policies restricted participation in airdrops and limited their usage of certain projects.
Percentage of Active Addresses in the U.S. in 2024: Approximately 22–24% of all active crypto addresses worldwide belonged to U.S. residents.
Total Airdrops Value from Our Sample: In our sample of 11 projects, they have collectively generated a total value of approximately $7.16 billion to date, during which approximately 1.9 million claimers participated worldwide with an average median claim value of around $4.6 thousand per eligible address.
Estimated Revenue Lost to U.S. Users from Our Sample: Of our sample of 11 geoblocked airdrops, the total estimated revenue lost to U.S. users ranges from $1.84 billion to $2.64 billion from 2020–2024.
Estimated Revenue Lost to U.S. Users from a Sample from CoinGecko: Applying our percentage of active addresses in the U.S. to another sample of 21 geoblocked airdrops analyzed by CoinGecko, the total potential revenue lost to U.S. persons could have been between $3.49 billion and $5.02 billion from 2020–2024.[5]
Missed Personal Tax Revenue from Geoblocked Airdrops: Based on our sample of geoblocked projects (used for a lower bound) and that of CoinGecko (used for a higher bound), the estimated federal tax revenue lost due to geoblocked airdrop income between 2020 and 2024 is estimated between $418 million to $1.1 billion, with an additional estimated state tax revenue loss of $107 million to $284 million. In total, this represents an estimated tax revenue loss of $525 million to $1.38 billion. These estimates do not account for additional tax revenue that would have been generated from capital gains taxes upon the eventual sale of these tokens, representing a further source of missed government revenue.
Corporate Tax Revenue Lost from Offshore Migration: The shift of crypto operations offshore has substantially reduced U.S. tax revenues. For instance, Tether, which reported $6.2 billion in profits in 2024 but is incorporated offshore, could have contributed approximately $1.3 billion in federal corporate tax and $316 million in state taxes if it had been fully subject to U.S. taxation. While actual liability would depend on corporate structuring, this is just one company—illustrating the broader tax revenue losses from crypto firms operating offshore.

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Executive Summary

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