Dragonfly’s State of Airdrops Report 2025
https://airdropreport2025.dragonfly.xyz/Dragonfly-s-State-of-Airdrops-Report-2025-1b1af13b644180c8aff9c2bd0d222e14#1b1af13b64418171afeae5dad38cc8c7
PDF→25.03.11_Dragonfly’s State of Airdrops Report 2025_Dragonfly Report
Executive Summary
Airdrops serve as strategic tools for blockchain adoption and value distribution, enhancing user engagement, decentralizing governance, and rewarding community participation. However, regulatory uncertainty in the U.S. has led to restrictions on participation in airdrops, resulting in significant economic losses.
Key Findings
- Impact on U.S. Users
In 2024, an estimated 18.4 to 52.3 million U.S. residents held cryptocurrencies, with 920,000 to 5.2 million affected by geoblocking policies that restricted participation in airdrops. - Percentage of Active Addresses in the U.S.
Approximately 22–24% of all active crypto addresses worldwide are estimated to belong to U.S. residents. - Total Value of Airdrops
The 11 geoblocked airdrops analyzed in the report generated a total value of $7.16 billion, with 1.86 million claimers worldwide and an average median claim of $4,600 per eligible address. - Estimated Revenue Lost to U.S. Users
Due to geoblocking in 11 projects, U.S. users are estimated to have lost $1.84 billion to $2.64 billion in potential revenue. When applying data from CoinGecko’s analysis of 21 geoblocked airdrops, the total potential loss could reach $3.49 billion to $5.02 billion. - Estimated Tax Revenue Lost
Between 2020 and 2024, the estimated federal tax revenue loss from geoblocked airdrops ranges between $418 million to $1.1 billion, while state tax revenue losses are estimated between $107 million to $284 million. In total, this represents a tax revenue loss of $525 million to $1.38 billion. - Loss of Corporate Tax Revenue
Due to regulatory uncertainty, many crypto companies have moved offshore, leading to significant corporate tax losses. For example, Tether, which reported $6.2 billion in profits in 2024, would have paid $1.3 billion in federal corporate taxes and $316 million in state taxes if it had been based in the U.S.
U.S. Regulatory Environment
- Airdrops and Securities Law
The SEC has suggested that airdrops could be considered securities, creating legal risks that lead projects to exclude U.S. users. - Regulatory Confusion
Court rulings in Ripple’s case (XRP programmatic sales are not securities) and Terraform Labs’ case (all transactions classified as securities) contradict each other, deepening legal uncertainty. - Increasing Offshore Migration
Due to regulatory uncertainty, major crypto firms like Coinbase and Ripple have expanded operations overseas to avoid enforcement risks.
Economic Impact of Airdrop Restrictions
- Shrinking U.S. Market
The U.S. share of global crypto developers has dropped from 38% in 2015 to 19% in 2024, reflecting a major shift in industry operations abroad. - Estimated Revenue Lost to U.S. Users
The 11 geoblocked airdrops analyzed resulted in estimated U.S. user losses of $1.84 billion to $2.64 billion.
When applying CoinGecko’s data, the potential U.S. user loss could be $3.49 billion to $5.02 billion.
Problems with Current Regulations
- Increased Compliance Burden
- Users receiving airdrops must report them as taxable income upon receipt.
- Companies face high costs to implement U.S. user restrictions.
- U.S. crypto projects are moving offshore, reducing tax revenues.
Recommendations
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Establish a Safe Harbor for Airdrops
- Recognize airdrops as a tool for network effects rather than fundraising.
- Require transparency while prohibiting fraud and manipulation.
- Apply to tokens used for participation rather than investment.
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Expand Rule 701 to Include Platform Participants
- Allow platforms to compensate users with tokens legally, even if they are not employees.
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Retroactive Legalization of Past Airdrops
- Grant amnesty to past airdrops that meet disclosure and compliance standards.
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Tax Reform for Airdrops
- Tax airdrops upon sale, not upon receipt, similar to credit card rewards.
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Regulatory Experimentation Post-Election
- Implement temporary rules and sandboxes to allow for regulatory flexibility.
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Congress Should Engage with the Industry
- Establish clear guidelines to ensure predictability for crypto projects.
Conclusion
Airdrops play a crucial role in blockchain adoption and decentralized governance, but U.S. regulations mischaracterize them as securities, creating unnecessary legal and economic burdens.
Due to regulatory uncertainty, many crypto companies are moving offshore, resulting in reduced tax revenues and a loss of global competitiveness for the U.S..
By implementing clear and structured regulations, the U.S. can retain leadership in blockchain innovation while fostering economic growth and ensuring fair taxation.
