What to Do With Your Airdrop Tokens? Hold, Sell, or Stake?

Wondering what to do with your airdrop tokens? This comprehensive guide explores strategic options for managing tokens from cryptocurrency airdrops, including when to hold, sell, or stake for optimal results.

Cryptocurrency airdrops are a distribution method where Web3 projects give away new tokens to eligible community members who have completed certain network tasks. They serve multiple purposes, such as rewarding early adopters and supporting marketing strategies.

By conducting airdrops, projects aim to build awareness and encourage adoption of their cryptocurrency. Our analysts have covered this topic extensively in a article on why projects conduct airdrops.

Why Post-Airdrop Strategy Matters

After participating in an airdrop and receiving tokens in your wallet, you face a crucial decision: what to do with these assets? Some participants immediately sell to secure profits, while others hold hoping for long-term growth. These decisions significantly impact your investment outcomes.

Recent market data reveals the volatility of airdrop tokens. According to CoinGecko research, 46% of major crypto airdrops since 2020 reached their peak prices within just two weeks of listing. Throughout the current market cycle, we've seen performance ranging from extraordinary 1,180% gains (Hyperliquid) to devastating 95% losses (Starknet), highlighting why strategic token management matters.

By carefully evaluating factors such as token fundamentals, market conditions, and community strength before deciding what to do with your airdrop tokens, you can better align your approach with your risk tolerance and financial goals.

Understanding Your Crypto Airdrop

Before making decisions about your tokens, consider these key factors:

• Project evaluation: Analyze the cryptocurrency project backing the token, including team credentials and technological innovation.

• Token metrics: Examine the token's utility, value proposition, and overall tokenomics model.

• Token distribution schedule: Review allocation and vesting details to understand potential supply changes.

• Wallet security: Ensure your tokens are stored securely to prevent unauthorized access.

• Market conditions: Observe factors like liquidity, trading volume, and overall sentiment.

• Community strength: Gauge the community engagement and growth.

Linity conducts much of this analysis prior to token distribution. The details can be found on our opportunities pages.

However, once tokens are in your wallet, managing them is your responsibility.

Post-Airdrop Strategies Explained

Here are the main strategies for managing your airdrop tokens, with examples from recent market performance. These aren't personalized recommendations but rather an overview of approaches observed in the market.

1. Holding Tokens

"Holding" means keeping your airdrop tokens in your wallet rather than selling after receiving them. This strategy requires patience and conviction in the project's long-term potential.

Looking at historical data from current and previous market cycles, some participants who held certain tokens enjoyed substantial gains, while others experienced significant downturns.

Possible reasons for holding tokens might include:

• Strong fundamentals and real-world utility
• Clear development roadmap and a team with a proven track record
• Fair token distribution and vesting schedules
• Generally favorable market conditions

Examples where holding benefited token recipients

Hyperliquid ($HYPE) - rewards up to $29,000

• All-Time High: $34.96 (Dec 22, 2024)
• All-Time Low: $2 (Nov 29, 2024)
• Total Growth (ATL to ATH): 1,648%
• Current Price: $23.64 (Feb 19, 2025)

Hyperliquid’s token launched at $2 on November 29, 2024, and grew to $9.80 within three days. Unlike many airdrops that trend downward after initial excitement, $HYPE continued climbing to a high of $34.96 in late 2024, As of February 19, 2025, $HYPE trades at $23.64, generating an extraordinary 1,180% return for holders who resisted the temptation to sell during early price surges. This performance has elevated Hyperliquid to the hall-of-fame of crypto markets, with its $7.9 billion market capitalization and the 25th position among tokens.

The secret to Hyperliquid's success lies in its thoughtfully designed distribution model. For those who participated and held their tokens, Hyperliquid shows what successful airdrop participation looks like. It provided good financial returns and demonstrates how token distributions can support ecosystem growth.

Morpho ($MORPHO) - rewards up to $30,000

• All-Time High: $4.17 (Jan 17, 2025)
• All-Time Low: $0.7132 (Nov 25, 2024)
• Total Growth (ATL to ATH): 484%
• Current Price: $2.20 (Feb 19, 2025)

Morpho also showed stronger-than-expected price stability, moving from $0.7132 to a peak of $4.17—an approximate 484% increase in a short timeframe. While there have been fluctuations, it remains in a range higher than its initial distribution price, suggesting a degree of ongoing market interest.

Kaito - rewards TBD

• All-Time High: $1.93 (Feb 17, 2025)
• All-Time Low: $0.906 (Feb 20, 2025)
• Total Growth (ATL to ATH): 113%
• Current Price: $1.25 (Feb 20, 2025)

Kaito aims to make Web3 content discovery easier through AI-based aggregation. Since its release on February 20th, $KAITO’s token price evolution has been somewhat stable, with the potential for further growth. It's still early in its lifecycle so time will tell how good the token performance will be. However, for the time being, it's qualifying for the benefitting from holding token category.

2. Selling Tokens

Selling involves converting your airdrop tokens into other cryptocurrencies (typically stablecoins, BTC, or ETH) soon after distribution. This strategy focuses on securing immediate profits rather than waiting for potential future gains.

Based on the market cycle of 2023-2025, this strategy yielded positive results in many cases—especially when tokens launched at high valuations or when projects had uncertain fundamentals.

Generally, the token sale strategy could make sense when:

• Token launches at a high valuation.
• Token metrics show significant upcoming unlocks (scheduled releases of previously locked tokens)
• Limited or uncertain token utility
• Market sentiment is overly optimistic
• Token has already reached the targets, be it price-wise, or development wise.

Examples where selling benefited token recipients:

Starknet ($STRK) - rewards up to $27,000

• All-Time High: $4.41 (Feb 20, 2024)
• All-Time Low: $0.182 (Feb 3, 2025)
• Total Decline (ATH to ATL): 95%
• Current Price: $0.22 (Feb 19, 2025)

The Starknet Foundation distributed over 700 million STRK tokens to nearly 1.3 million addresses. The price peaked at $4.41 shortly after the airdrop but plummeted to $0.182 within a year, representing a 95% loss.

This case clearly demonstrates how selling tokens immediately after receiving them would have benefited airdrop recipients. The dramatic decline stemmed from various factors, including questionable tokenomics, community concerns, airdrop farming, and unfavorable market conditions.

Altlayer ($ALT) - rewards up to $56,000

• All-Time High: $0.676 (Mar 28, 2024)
• All-Time Low: $0.043 (Feb 18, 2025)
• Total Decline (ATH to ATL): 94%
• Current Price: $0.045 (Feb 20, 2025)

Altlayer token experienced a dramatic decline since its peak in March 2024. Starting from an ATH of $0.676 to an ATL of $0.043. The constant downward trend suggests waning market interest and confidence in the project.

Wormhole ($W) - rewards up to $32,000

• All-Time High: $1.66 (Apr 3, 2024)
• All-Time Low: $0.1263 (Feb 25, 2025)
• Total Decline (ATH to ATL): 91%
• Current Price: $0.1263 (Feb 25, 2025)

The Wormhole airdrop distributed 678,823,000 $W tokens, representing 6.78% of the total supply, to over 40,000 qualified wallets. Despite initial optimism, the token's price trajectory has been consistently downward. From its ATH of $1.66 at launch during May 2024, $W tokens plummeted to $0.1263 by February 25th, 2025, representing a 91% loss for holders. Looking at the price chart, we can see a clear pattern of declining value with minimal recovery periods.

3. Staking Tokens

Staking involves locking your airdrop tokens to support network operations in exchange for rewards. This strategy can provide passive income while maintaining long-term exposure to the project.

Key Staking Considerations typically include:

• Lock-up periods and unstaking requirements
• Annual percentage yield (APY)
• Validator or pooling fees
• Smart contract risks

Examples of existing staking opportunities:

Hyperliquid ($HYPE) - Staking Opportunity

• APY: 2.15% - 2.26%
• Reward fee: 0 - 5%
• Unstake period: 8 days

For investors holding $HYPE tokens, the project continues to offer value beyond price appreciation through its staking program. The staking process on Hyperliquid is designed to be user-friendly. There’s no minimum requirement for the amount of $HYPE tokens you must stake. The rewards are sourced from future token emissions and tend to vary only slightly among different staking validators (2.15 - 2.26% annual percentage return).

You can follow the step-by-step tutorial on how to stake $HYPE in our Hyperliquid staking guide.

ZND ($ZND) - Staking Opportunity

• APY: 8.3% - 75.2%
• Reward fee: None
• Unstake period: Variable (based on the staking duration of choice)

ZND is a digital finance platform designed to make trading, earning, borrowing, and managing investments accessible and straightforward. After the ZND crypto airdrop campaign yielded successful results, the users of the ZND platform can enhance their token utility via staking. The Staking Program lets you lock up your $ZND tokens to earn rewards. Users get flexible staking options, higher rewards for commitment, and a steady reward system.

Read our step-by-step tutorial on how to stake ZND.

Movement Labs ($MOVE) - Staking Opportunity

MOVE token launched at $0.64 and has experienced significant price volatility since. As of February 19th, 2025, the token trades at $0.4977, showing relatively neutral performance compared to other crypto airdrops. This stability might indicate a more sustainable tokenomics model.

Hybrid approaches (partial sell/hold/stake)

A balanced approach often yields solid results. You might want to consider dividing your airdrop tokens into portions:

• Immediate profit-taking
• Staking for passive income
• Holding for potential upside

Hybrid strategy helps manage risk while maintaining exposure to project growth. This strategy depends heavily on the airdrops' token utility. Projects that could apply for the hybrid approach include Movement Labs, Celestia, Ethena, and ZkSync.

Tax Considerations

Tax obligations for airdrop tokens vary by jurisdiction. In some countries, receiving tokens from a cryptocurrency airdrop may be taxable upon receipt, while others tax only when tokens are sold. Additionally:

• Staking rewards often count as regular income
• Some regions apply preferential rates to gains from longer holding periods
• Meticulous record-keeping is essential for compliance

Consult with a tax professional familiar with crypto regulations in your location to ensure proper compliance.

Recommended Market Analysis Tools & Websites

Track key metrics through platforms such as:

• DefiLlama for total value locked (TVL), protocol volumes, and overall health check of the protocol or project.
• Token Terminal for in-depth analysis of cryptocurrency project metrics.
• Linity for discovering new airdrop opportunities, staking options, and relevant market insights.

Conclusion - There Is No “One-Size-Fits-All”

Every airdrop is unique, with its own tokenomics, market conditions, distribution methods, and community dynamics. Historical trends from 2024–2025 demonstrate varied outcomes:

Holding strategy seems to work when (Kaito, Hyperliquid, Story Protocol, ZND, Morpho):

• Project had significant traction and unique product market fit
• Strong token utility existed
• Project had clear vesting schedules
• Development progresses consistently
• Community engagement remained robust after token distribution

Sell strategy worked when (Starknet, Altlayer, Wormhole, Taiko, Republik, Xai, Usual)

• The airdrop had high initial hype
• Large numbers of airdrop farming participants received tokens
• The number of tokens was undetermined
• There was unclear utility

Hybrid strategy worked well when (Movement Labs, Celestia, Ethena, ZkSync):

• Staking rewards were introduced
• There were multiple profit-taking opportunities emerged based on the price appreciation
• Market sentiment was fluctuating dramatically

The key is analyzing each airdrop individually, considering project fundamentals, token utility, market conditions, and your personal risk tolerance before deciding what to do with your airdrop tokens.