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Howdy!

I’m down in Kentucky staying with family for a bit, and a family member approached me to ask what my new podcast was all about.

When I told him it was covering a blockchain and its ecosystem, he nodded in a way that let me know he won’t be tuning in. But for the rest of you, check out my first episode co-hosting the Lightspeed podcast!

Anyways:

Airdrop season winds down

Crypto, and Solana in particular, saw a deluge of projects releasing native tokens since the start of the year. In recent days, the stream seems to have mostly dried up.

This airdrop season also generally coincided with a crypto bull run that saw the market come roaring back from a prolonged post-FTX stupor. In their first few months, the new token launches based in Solana were a mixed bag.

Jupiter’s JUP has been a bright spot, climbing roughly 25% from the time CoinGecko began tracking. Jito, Drift, and Pyth are all roughly flat since their launches. Kamino, Sanctum and Zeta all saw their token prices fall. Based on supply and demand dynamics alone, you’d expect tokens to shed price after airdrops — but that hasn’t kept recipients from vocalizing their grumpiness when their new coins dump.

Particular contempt has been aimed at so-called low float, high fully diluted valuation (FDV) tokens, which are tokens that can be theoretically worth billions in the aggregate but only see a small amount trading, meaning that the tokens will dilute over time.

Part of what allows projects like Jito and Jupiter to garner multiple billions of dollars-worth in FDV is the frothiness that comes with a bull market. As markets shrink and fears of a recession reignite, these tokens may struggle to see a positive price chart over the long term. It’s perhaps fair to ask, as some have, whether airdrop season came too soon, and projects would have been better served launching tokens amid more bearish conditions — when markets have more future upside.

“I don’t think it came too soon,” Drift core contributor David Lu said in a text when I asked if projects should have been more patient when it comes to airdrops. Drift airdropped its token in May.

Lu said Jito and Jupiter, which launched around the new year, had “perfect” timing, but some airdrops to follow had “relatively inflated valuations for what they were worth,” and memecoin launches sucked some liquidity out of the system.

But launching in an even lower liquidity bear market environment is a “gutsy move,” although tokenomics and launch dynamics are probably the most important factors in tokens’ fates, Lu said. He added that Sanctum’s recent CLOUD airdrop might mark the end of the airdrop trend for the time being.

“I thought $CLOUD did an admirable job, a lot of other projects that were eying launches like DeBridge decided to yank their plans after seeing $ZEX i think,” Lu wrote.

Zeta Markets’ ZEX carried out its airdrop in late June and is already down more than 80% from its initial price on CoinGecko.

It might be too soon to definitively crown this most recent airdrop season’s winners and losers, and early price dynamics could wash out over time in favor of quality.

“[P]rojects driven by greed and upfront token emission schedules are likely to decline. Ultimately, the market will correctly price everything over time,” Intuition Systems operations and strategy head Matthew Kaye said.

And either way, industry participants I spoke with generally said playing timing games with market dynamics is probably a waste of time.

“I think if any founder told me ‘I’m thinking of waiting until a bull market / bear market / something else to come up with my airdrop strategy’ I’d tell them to stop trying to time the market, just get users,” Dragonfly managing partner Haseeb Qureshi told me.

— Jack Kubinec

Zero In

13.81%

That’s the proportion of transactions per Solana block being taken up by ORE mining, according to a Dune dashboard.

The experimental proof-of-work currency enabled mining for “ORE v2” yesterday, and the last iteration of the project led to a period of pretty bad network congestion on Solana. It’s too early to tell whether ORE and Solana have patched things up well enough to keep this from happening again, although ORE’s developer seemed optimistic when we last spoke.

— Jack Kubinec

The Pulse

Solana’s price is on the rebound following yesterday’s severe market sell-off, driven by US recession fears and Japanese market volatility. At the time of publication, the price has risen from $130 to around $146, around 12% up on the day.

Users on X expressed optimism, with many celebrating the asset’s recovery and predicting further gains. @Empire8x tweeted, “Nice bounce back for $SOL! Keep climbing!” and @X_Four_iv cheered, “Solana’s comeback game is strong!” Users like @UFO_UAP noted Solana’s technical strength, saying, “It’s quite remarkable. Who else loaded up on that dip?” while @cozypront alleged, “Solana closed the daily above support. Keep in mind every time it wicked under support and bounced, it ended up going to 180s minimum.”

Some still appeared shaken, like @PattyParlay1 who said, “For the love of god please tell me we go up now.” Others were undeterred in their expressions of relief. @patty_fi enthused, “Not concerned with nonsense when Solana is absolutely making an amazing rebound,” and @cozypront advised, “They gave you a chance to buy at $110. This is the strongest asset of this cycle. Up a lot. Up often.”

Echoing the positive sentiment, @irieZer0 stated, “If Solana goes bonkers this cycle many many millionaires will be printed.” @SolanaHubApp encouraged, “GO GO GO Solana,” and @winallday_ confidently predicted, “Solana to 200 is inevitable.”

— Jeffrey Albus

One Good DM

A message from Will Patterson from Third Earth Capital: