The results of Parcl’s Tuesday airdrop of PRCL tokens were far below expectations. 

Projected to trade between $1.5 and $2, the token is trading below $0.5. The total value locked (TVL) on the platform, meanwhile, plummeted from $150 million to less than $100 million over the past five days.

Learn more: What Is a Crypto Airdrop? A Beginner’s Guide

Why did PRCL perform so poorly? In macro terms, the broader crypto market is suffering due to the possibility of war in the Middle East, contributing heavily to a massive $500 billion market cap loss since last Friday with altcoins, like PRCL, taking the biggest hit. 

The need for liquidity, especially to cover leveraged positions, was palpable. As noted by @alpha_pls on X, “People are down bad last few weeks. Makes sense they would take whatever liquidity they could get right now.”

Parcl’s airdrop also apparently favored large investors, commonly known as whales. The airdrop’s linear distribution model left many smaller investors disappointed.“I have to agree with most that the $PRCL distribution could’ve been a lot better. Especially for the top % and the top 5 distribution,” wrote NFTwaad on X.

What other projects can learn

The state of volatile markets and PRCL’s poor performance raises the question of whether projects like Kamino and Drift might consider delaying upcoming token launches. 

The recent performance of similar Solana-based tokens adds to the argument for delaying. 

Wormhole’s W token, for instance, is now trading at just $0.5 — despite launching at $1.5 in more stable conditions, having lost $1.5 billion in market cap since its airdrop two weeks ago. A critical factor cited as contributing to its poor performance has been its lack of utility — there’s little to do with it besides providing liquidity in DeFi pools.

This stands in contrast to Ethena’s ENA token, which users can lock into the platform to earn more points. This functionality reduces the selling pressure on ENA, helping maintain its value better than those of W or PRCL.

The PRCL airdrop sheds light on the critical need for good timing, fair token distribution, and real utility in token launches, especially in uncertain times.

Also read: Starknet Usage Is Way Down Post-Airdrop, Showing No Signs of Stopping