Doodles' DOOD Token Drops 40% Post-Airdrop

The newly launched DOOD token from the Ethereum-based NFT project Doodles experienced a significant drop in market capitalization following its May 9 airdrop on the Solana network. Initially, the market cap of DOOD surged to over $100 million shortly after its launch but quickly fell to around $60 million. This decline was described as "definitely underwhelming" by a crypto commentator.

The airdrop event was highly anticipated, with specific meme coin holders eligible to receive free DOOD tokens. Binance, a leading cryptocurrency exchange, provided key details on the eligibility criteria for the airdrop, specifying that holders of certain meme coins, including Mubarak (MUBARAK), CZ’S Dog (BROCCOLI714), Test (TST), and Baby DogeCoin (1MBABYDOGE), would be eligible to receive DOOD tokens. The snapshot time for capturing users' holdings was set for May 7 at 00:00 UTC, and eligible users were to receive their tokens promptly after the airdrop.

The airdrop event was structured into two phases. Airdrop 1 was designated for the top 40,000 users with the highest token holdings of the specified meme coins, while Airdrop 2 was for the top 10,000 users with the largest KOMA token holdings. Users were required to complete their Know Your Customer (KYC) verification to participate in the airdrop. Additionally, Binance announced the launch of the DOODUSDT perpetual contract, offering users up to 50x leverage for futures trading, further supporting the market for the DOOD token.

Joining the trend, NFTs in Doodle’s flagship collection sharply dropped in value on May 9. The collectibles are down roughly 60% to less than 1.5 Ether (ETH) per NFT from about 3.5 ETH on May 8. As of May 9, the NFTs are collectively worth around $31 million. NFT prices often dip immediately after an airdrop, as holders look to capitalize on their allocations by selling into the market. For instance, sales of Doodles’ NFTs surged by some 97% on May 8 in anticipation of the airdrop. Over the past week, Doodles clocked roughly $2.6 million in total sales volume, up more than 350% from the week prior.

Doodles announced its token launch in February, outlining plans to mint 10 billion DOOD tokens on Solana and to eventually bridge them to Base, an Ethereum layer-2. Doodles is the latest Ethereum-native NFT brand to list a token on the Solana network. It follows Pudgy Penguins, an even larger NFT project that airdropped its PENGU token on Solana in December. Similarly to Doodles, Pudgy Penguin’s token dropped by around 50% on the day of its airdrop. The PENGU token’s market cap reached an all-time high of roughly $2.8 billion and has since traded down to roughly $900 million.

Despite the initial excitement and the surge in NFT sales leading up to the airdrop, the DOOD token's price has since stalled. This stagnation can be attributed to several factors, including market saturation and the distribution of tokens to a large number of users, which may have diluted the token's value. The airdrop, while successful in generating interest and participation, did not translate into sustained price momentum for the DOOD token. This highlights the challenges faced by new tokens in maintaining value post-airdrop, as the market adjusts to the increased supply and distribution of the token.

The Doodles NFT project's airdrop event serves as a case study in the dynamics of token distribution and market response. While the airdrop generated significant interest and participation, the subsequent stall in the DOOD token's price underscores the importance of sustained market support and value proposition beyond the initial hype. As the crypto market continues to evolve, projects like Doodles will need to focus on building long-term value and utility for their tokens to achieve sustained success.