Table of ContentsToggle
Introduction to Crypto Airdrops:
Similar to obtaining any assets, crypto tokens are invested in by investors or traders to incur gains, while investing in established tokens is the road mostly travelled by, crypto airdrops is a simple and easy marketing strategy that gives new projects exposure in the market. To further explain the crypto airdrop process, there involve blockchain-based projects and developers to send out free tokens to members of their communities. This initiative is usually a part of a broader marketing initiative.
As the crypto projects are mostly community based, the process of airdropping crypto tokens, is mainly taken up in order to send newly minted tokens to hundreds or maybe thousands of different wallet addresses with the thought process that the recipients will be more inclined to engage with the corresponding project. This is the reason why crypto airdrops are an inexpensive way for investors to make some additional returns on their portfolio.
The concept of crypto airdrop is more like a marketing strategy as it is similar to one finding a free discount card in their mailbox which encourages them to go give a visit to a new store that has opened in the area. Usually crypto airdrops are promoted on the company’s website, social media, and crypto forums and the tokens are sent to only certain specific wallets which are based on the blockchain or coins that are held in existing wallets.
Before diving deeper, let’s take a look into what crypto airdrops actually are.
What is a Crypto Airdrop?
In simple terms, crypto airdrops are a promotional activity that is typically performed by blockchain-based startups. This is mainly aimed to help bootstrap a virtual currency project. So basically, using crypto airdrop is a method used by companies, via which one can earn free crypto from a crypto project and also helps in garnering a little marketing.
The main aim of the crypto airdrop process, is to spread a little awareness about the crypto project along with getting more people to trade in it when the coin gets lists on an exchange as an initial coin offering; often referred to as an ICO. There are many ways in which one can receive these tokens. Many times an airdrop is associated with free cryptos, but this is not always necessarily true. One should have to put in time and effort to gain them or they may have to deal with transaction fees. In order to qualify for the free gift of crypto tokens, the recipient may require the need to hold a minimum amount of the crypto coins in their wallet. Other than that, they may also need to cater to certain tasks as a requirement. These tasks may include things like posting about the token on a social media forum, sometimes it also may require connecting with a particular member of the blockchain project, or writing a blog post.
Fun Fact? It is also possible to be able to participate in an airdrop for free!
Types of Crypto Airdrops
With processes such as crypto airdrop existing to make the crypto space more engaging for the community members, we should also look into the different types of crypto airdrop that is present. Though an interesting thing to notice, the several different types of airdrops that we have, all of them have some unique characteristics to distinguish them from each other.
A lot of crypto projects very commonly use airdrops as a marketing strategy where they can venture onto to try and grow as a project through the crypto airdrop marketing strategy. Such as, some crypto projects may be looking for more brand awareness or new users, or they may simply want to reward the users who were first in line.
Read More: How are Crypto Airdrop Taxed in India
This method of crypto airdrops are getting more popular. The reason being the participants being able to participate easily and the fact that it is free crypto because of it being a crypto airdrop. In order to distribute the tokens fairly, the distribution can take place via a draw. In this case, one has the chance to win free crypto, but they are not guaranteed to win the airdrop.
The first type of a crypto airdrop is a standard crypto airdrop. In this method, participants who are interested in receiving an airdrop may simply express their interest in order to receive the airdrop. All the participants have to do is provide a valid wallet address. Some airdrops does not require any more additional information other than this.
Standard airdrops often have a set amount of tokens that are to be distributed with a limit on the number of tokens the each individual will be able to receive. Therefore, this makes some standard airdrops time-sensitive.
As the name drops in a hint for being used in terms such as ‘bug bounty’, the bounty airdrops stands for something very similar. Participants can receive them as rewards for completing certain tasks. However, the tasks that one is required to do, takes a fair amount of work, so the price the participants will have to pay for free crypto tokens consists of both energy and effort. The tasks are not difficult but they are valuable for a crypto project. This is part of the reason why new projects are increasingly choosing this method of crypto airdrops.
In exchange for performing tasks, that often entail raising awareness of a project by posting on social media and tagging the company or retweeting a recent tweet about the project, users often receive points. The points garnered then correspond to how large of bounty airdrop they are to receive. Sometimes, users may also be required to earn a certain amount of points before they are qualified for their airdrop.
For example, one participant may be eligible for an airdrop after earning 300 points, where each item mentioned above is worth 100 points each.
The third type of crypto airdrop, holder crypto airdrops usually takes place automatically. The process is based on individual who is already holding existing tokens and the number of tokens that they are holding. As information on wallets and blockchain are part of a publicly distributed ledger, all the customers of blockchain has full transparency about the wallets and distribution of the tokens.
One disadvantage about holder airdrops is that the participants who may be holding tokens may not want an airdrop. However, holder airdrops do ensure that only the biggest, most invested participants receive the benefit of it.
Benefits of Crypto Airdrops
With the extreme competition that exists among crypto startups, the crypto airdrop marketing strategy is an attempt for them to stand out in the crowd. Some of the businesses who are devoted to crypto airdrops often uses certain methods in order to fine-tune their airdrops. These methods include;
- alerting users
- provides listing services to startups,
- a range of different marketing services
Interestingly, crypto airdrops also holds the advantage of rewarding the loyal patrons of specific blockchain networks. Apart from that, sending airdrops to every wallet or the existing token holders vastly distributes tokens in such a manner that may not occur naturally in an open market.
- It rewards early adopters of a project or participants who are engaged with a project with a stake in it
- The process helps in spreading awareness of a crypto project as an airdrop is often a marketing strategy
- It motivates the use and adoption of a new token
- It can distribute tokens among holders in a way that would not have been possible in an open market
- It can have security threats if wallet holders somehow connects their wallets to suspicious sites in order to claim the airdrop
- It can be used to be a part of the “pump-and-dump” schemes
- May dissuade some investors from participating if they prefer different ways of distributing tokens
- They can turn out to be worthless if the token cannot have liquidity on an exchange
How to Find Crypto Airdrops & Prepare for Crypto Airdrops
Since the process of crypto airdrop has initially been designed for promotional and marketing efforts, to ensure that one are eligible for future events can be tricky. Assessing eligibility is different as each airdrop has individual requirements for its eligibility criteria. However, the eligibility pointers are not that hard to find. A crypto airdrop project that involves a blockchain snapshot is often communicated after the airdrop plans are made, which makes qualification difficult. However, some of the other options that one can explore, are:
Search for dedicated crypto airdrop websites, which are very similar to how one signs up for promotions from a store.
Scroll social media for the #airdrop hashtag and check for anything new that has happened.
To remain active on different crypto services, products, platforms and blockchains.
Exploring crypto-related forums and news portals to look for announcements of a recent or upcoming airdrop.
Moreover, it is more important to note that the main requirement to receive crypto airdrops is having a crypto wallet with some balance in it.
Risks of Participating in Crypto Airdrops
Though we have already gone through the cons of crypto airdrops, there remains certain risks to participating in these events. The whole process of crypto airdrops often seem harmless and safe, but this is not always the case. Scammers have also found methods to scam people through airdrops. They usually do that by taking away the individual’s crypto or private keys.
One thing to keep in mind is that any legitimate crypto airdrop will never seeks capital investment in the currency. The aim of crypto airdrop is absolutely promotional. With that being said, some crypto scams also involve sending micro amounts of bitcoin or any other crypto tokens to unsuspecting recipients. This is what is known as a dusting scam.
However interesting the process seems, it is not absolutely devoid of being scammed out of. To ensure that one does not become a victim of a scam, it can imperative that they do thorough research before getting onto the process. They can also so some research about the team behind the crypto project and make a note of what others think about it.
NFT airdrops are a common method for promoting and marketing new NFT series or projects. Some airdrops will also reward current holders of a coin, token, or NFT with a new NFT. Crypto airdrops are ways to earn free crypto tokens, which in turn can gain value for the receiver. Getting free airdrops require individuals to take part on forum discussions and have a crypto wallet with some balance in it.
What Is an NFT Airdrop?
Can you make money from crypto airdrops?
How to get free crypto airdrops?
NFT airdrops are a common method for promoting and marketing new NFT series or projects. Some airdrops will also reward current holders of a coin, token, or NFT with a new NFT.
Crypto airdrops are ways to earn free crypto tokens, which in turn can gain value for the receiver.
Getting free airdrops require individuals to take part on forum discussions and have a crypto wallet with some balance in it.
Introduction Solana stands out for its lightning-fast transactions and robust…
Explore top altcoins poised for impact amid Ethereum Dencun Upgrade.