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What Is a Cryptocurrency Airdrop?

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Imagine you can get cryptos absolutely for free...is it a joke or reality? No, that’s called an airdrop, and to reveal that mysterious thing, we need to do quick research together. 

 

Crypto Airdrop Explained

Simply speaking, it’s just a marketing technique, but it doesn’t mean that it’s something terrible and dangerous, although, of course, it involves some risks. So if you are careful and attentive, you can get some profit from those airdrops, as well. 

The nature of an airdrop lies in distributing cryptocurrency coins or tokens for free to attract some attention. There are so many different cryptos out there, around 9000 thousand coins or even more, so no wonder some of them want to become more noticeable. To make a product unique, one should think of new ways to build a dialogue with users, and sometimes an airdrop is a real way out. 

 

Airdrop’s mechanism

Think of a developer who has a blockchain project and wants to distribute that and promote it throughout the world and reach out to broader communities. What is the best way to do that? Of course, when you create a high-quality product, it speaks for itself, but it takes time, and it’s not always that evident for others that there is a great new project out there. Or, the situation when a project wants to reward its loyal community, what should it do? Again, an airdrop comes to help. 

So, a project can preannounce the upcoming airdrop to make a fuss and get the community involved or make it as a surprise, so only those who are devoted and follow the project’s news and events will be right in time to get their free cryptos. 

News about forthcoming airdrops could be found on various crypto projects’ websites, airdrops trackers like Airdrop.ioAirdrop Alert, or just googling some information on the topic. By the by, CoinMarketCap has its own airdrop they launched in May 2021. 

A participant can get cryptos for free in different cases such as startups mint some cryptos to promote their project and give them away to the participants, a user needs to hold a particular coin/token, or a user has to do some tasks — to post about a project on their social media page, for instance. 

To put it in a nutshell, airdrops help a company or a project to:

  1. create awareness among users
  2. reward users for their activity
  3. attract more investments
  4. find out more about its community

 

Different types of Airdrops

Standard

Anyone could be involved once submitting the required information, providing a wallet address, or maybe doing a simple promotional task. In this case, you’ll just get some free cryptos from the project directly to your crypto wallet without any difficulty.  

 

Bounty

This one acquires to participate in the project’s activities and be more or less involved, as it’s not the same as with the standard one when you just sign up with the project and provide your address to get free cryptos. Bounties sometimes want you to share a post about the project’s product on a social media platform, sign up for its newsletter, or join a discussion group in its forum. As you can see, there are more activities, but they are pretty simple and sometimes even interesting and gripping. 

 

Exclusive 

The exclusive one is for people who follow third-party aggregators sharing the news about upcoming airdrops, and we mentioned some of them earlier. It mainly considers those who were loyal through time to a particular project, so they have a kind of VIP access to the airdrop program. 

 

Hard Fork

They appear when a blockchain creates a new one that simultaneously runs with the first, original version. So, if you had invested in a blockchain before a hard fork appeared, you’ll get newly generated coins, as well. That’s a hands-off, easy process of getting a passive income, but it sounds mainly like a happy coincidence.

 

Holder 

It’s about people who hold some amount of definite cryptos in their wallets. A project takes a snapshot of crypto holdings on a specific date and then asks people to claim that they own the crypto at that time and verify the fact.  

 

Pros and Cons of Crypto Airdrops

Pros

Cons

Free cryptocurrency 

some free tokens could end up being rather valuable ones, and grow in price over time

Worthless cryptocurrency

some tokens just don’t have any value, so it’s useless to hold them. 

Good for ICO (initial coin offering)

airdrops are fruitful in order to grab more people’s attention, it’s a great way to say ‘hello!’ to the crypto world for some companies and projects

Fraud

scammers can reach you there, but only if you are not careful enough and don’t check the information thoroughly.

 

Closing thoughts

Overall, airdrops are a beneficial way for both — a participant and a developer to become acquainted and learn more about each other. It helps to build a bridge between a project and its user. People love getting money for free, that’s not a big surprise, but that’s not only about that. In the variety of numerous projects, it’s pretty challenging to find each other, so an airdrop, once it’s not a fake one, could be a nice technique to develop a company’s credibility and to tell thank you to a new user, who may come to stay with a project forever, or to the one who’s loyal to the community for years. 

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