Understanding Crypto Airdrops

 

Most of the tokens that gained popularity and mass adoption all started from crypto airdrops. Because cryptocurrency has thrived and expanded into a trillion dollar market, tokens are now funneled through marketing and distributing strategies that disburse free tokens to users in exchange for completing certain tasks like signing up, interacting with a particular project or interface, holding another coin or mass referrals. Not every project started with a big hype, or came from a top exchange like BNB for Binance or carried celebrity endorsements like the coin Doge endorsed by Elon Musk. Investment wise, a lot of investors have used airdrops as a way to gain early exposure to projects that catches their fancy, some of these projects eventually turn into giants. Developers see airdrops as a rather low cost way of rewarding loyal users, early adopters, and to spread awareness of a project through the hype surrounding the airdrop, gaining a loyal community base is also another reason airdrops are carried out by projects. In this article we’ll be explaining what crypto airdrops are and what crypto projects turned into successes, this is not financial advice, just an exploration. Crypto Airdrops Explained An airdrop is a marketing strategy carried out by blockchain projects in which their tokens or coins are freely distributed to the wallet addresses of users. Offering this small amount of new digital currencies to active blockchain community members fosters engagement and trading when the currency is then listed on an exchange. It is a community building campaign that is utilized instead of the selling the tokens through an Initial Coin Offer (ICO) or an exchange launch. Airdrops are an assured method of putting the tokens or coins directly in the hand of potential users. Airdrops usually receive promotion on a company’s website social media and crypto forums, users engage these posts aggressively as instructed by the company, offering incentives like giveaways, extra tokens upon launch on exchanges, or free gifts. Types of Crypto Airdrops. Standard Airdrop In a standard airdrop, project participants who are interested in being receivers of the airdrop have to indicate their desire to receive an airdrop. Some projects require nothing more than the participants wallet address which must be valid. In standard airdrops, there is often a limited and specified total amount of tokens each participant will be entitled to receiving. This makes them time sensitive ventures though these airdrops are really popular because of their simplicity and easy procedures to being eligible for them, the upside to it is there’s a likelihood of a mischievous user using multiple wallet addresses to gather more airdrop amount.     Bounty Airdrop Bounty crypto airdrops happen when users carry out certain tasks which often involve raising awareness of a project by posting on social media, tagging, retweeting, mentioning them, commenting on their posts, adding the project’s name to their profile bios, making posts with keywords and so on. Users end up earning extra points for having a wider reach. Referral bonuses for actively recruiting newbies into the ecosystem, joining newsletters and Discord channels are also given. After the users perform all these tasks, they receive points that then convert into bounty airdrops which they receive. In some cases to qualify for the airdrop users must earn up to a certain amount of points.    Holder Airdrop Because wallets and blockchain information are part of a public ledger owing to the transparency that blockchain technology represents, all users of a blockchain have full access into the records of wallets and distributions of tokens. Holder airdrops occur automatically based on whose wallet is holding what number of coins or tokens. A problem with these kinds of airdrops however, is that individuals holding tokens may not wish for an airdrop, however this system of airdrops rewards large investors. Exclusive Airdrop This type of airdrop is carried out when a targeted group of people are selected for an airdrop. The stipulations and requirements for their selection may vary from time spent on the project to who spent the most money engaging in non-token activity, or even those with a higher number of posts on crypto forums that supported the project. This type of airdrop rewards people even though they might not be holding any of the token in their wallets. It encourages participants to be loyal and faithful in promoting and interacting with the project. Raffle Airdrop Projects encourage participants and users to earn a raffle ticket to qualify for an airdrop which has been announced to have a limit to its dispersal. This tickets can be held by simply holding the token, gaining points or expressing interest through your interaction and engagement. This however almost always mean that the number of interested parties often far exceeds the amount of airdrop that is available for the project to deliver and therefore a random selection of wallets is carried out to distribute the airdrop. Avoiding Crypto Airdrop Scams If you have understood what crypto airdrops are then you can see how vulnerable they are. A legitimate airdrop never seeks capital investment in the currency. Its aim is always and will be entirely promotional. However, in recent times, many airdrop scams rely on directing investors to connect their wallets to phishing sites in order to claim their airdrops. This option is available to the web3 community through Metamask, Trustwallet, or Phantom. After a participant connects their wallet through these phishing sites, their information is stolen via secret phrases or keys and their balances are wiped. To avoid being scammed, users should remain vigilant and watchful. It is important to Do Your Own Research. Don’t just jump on every hyped airdrop, check the legitimacy of any project you wish to engage with. Do not connect your wallet to any site you aren’t familiar with no matter how tantalizing their offer may be. Any external link you click on must come directly from the company itself on their official websites and social media pages. As a crypto enthusiast, the wallet you use to maintain your cryptocurrency portfolio and assets should be an entirely different one from that which you use to interact with airdrops.