Crypto projects are sending free tokens en masse to their communities to encourage adoption. We explore everything you should know about them so you can avoid feeling left out.
If you interact with cryptocurrency platforms frequently, there is a chance you will receive an airdrop at some stage. An airdrop involves a cryptocurrency or NFT project or developer sending free tokens to community members as a part of a marketing initiative.
During the airdrop, the blockchain-based company sends freshly minted crypto or NFT tokens to hundreds or thousands of cryptocurrency wallet addresses hoping that the recipients will become inclined toward engaging with the project. You want to compare this concept with the free discount cards in your mailbox that encourage you to visit a particular store.
The main focus is not necessarily for you to make money but rather raising awareness about a new project. Peril Akay, a design manager at financial services and tech company Brex, further explains:
“Crypto airdrop could be for two different things. One could be for marketing that involves sending coins or tokens to a wallet address to create awareness about a new project […]; the secondary purpose is for an existing project to have a governing mechanism. It typically always ties back to an existing project.”
How Airdrops work
While there are several different ways that crypto or NFT airdrops can be executed, the following are the three most common scenarios:
Bounty Airdrop: This involves a recipient getting involved in promotional activity such as signing for a newsletter or sharing a social media post so they can receive the said digital asset.
Holder Airdrop: The crypto project can take a snapshot of their community members’ digital wallets on a set day or time and allow members to claim an airdrop based on how much of the asset they already own.
Standard Airdrop: In this scenario, a crypto project distributes digital assets to all the wallets associated with its community.
Who is Eligible for an Airdrop?
Since airdrops are promotional and marketing campaigns, it’s not always easy to know how you can become eligible for upcoming events. Different projects have their requirements for eligibility, but most are easy to find. Some of the most straightforward options you can explore include the following:
- Locate a crypto airdrop website and sign up so you can get notifications via email.
- Check social media pages for the #airdrop hashtag and see if anything new has happened.
- Be an active user of different cryptocurrency services, products, platforms, and blockchains.
- Explore cryptocurrency-related forums and news portals for mentions of a recent or upcoming airdrop.
Remember that the main requirement for receiving crypto airdrops is ensuring that you have a balance in your cryptocurrency wallet without which you can’t clam or receive an airdrop. While using a cryptocurrency exchange is convenient to interact with cryptocurrencies, it’s not always suitable for receiving airdrops. It would help if you instead considered different crypto wallet like MetaMask where you can store your funds.
Recent crypto airdrops
Some of the most recent crypto airdrops in the cryptocurrency industry that took users by surprise are the following:
1. The OpenDao airdrop of SOS tokens rewarded all NFT creators, collectors, and enthusiasts who had ever made transactions with the OpenSea NFT marketplace. The airdrop helped OpenDao grow its Twitter following to over 60,000, and more than 120,000 addresses claimed the token.
2. The Gas DAO airdrop is another initiative that issued GAS token to every user who paid $1,559 or more in gas fees on Ethereum. More than 57,000 addresses claimed the airdrop.
A word of Caution
Despite the popularity of crypto airdrops, there is always a chance of a scam, meaning that users must take precautions.
Beware of pump and dump schemes where creators issue tokens and hope there will be enough hype surrounding it to have it listed on an exchange. Once tokens begin trading, the creator sells their sizeable portion of tokens, crashing the price.
Be careful to avoid becoming victims of a dusting attack, where scammers send small amounts of cryptocurrency to unsuspecting users to erode their privacy. After that, the attacker tracks down the transaction activity of the wallet tokens distributed to de-anonymize the person or company operating the wallet.