The crypto industry has new digital assets and tokens released frequently. Today, companies are trying many strategies to stand out from the clutter. Airdropping is one such marketing strategy. There are many forms of airdrops, from entire new lines of NFTs to bonus tokens. This article will help you to understand what an airdrop is and how it works.
What is a crypto airdrop?
A marketing strategy that involves sending crypto tokens directly to wallets is known as a crypto airdrop. Airdropping is done either for free or in return for doing a small task like retweeting a post or following an account. The goal of a crypto airdrop is to increase the availability and awareness of a crypto token amongst the general public.
Crypto airdrops are usually done before the initial coin offering (ICO) goes live. The ultimate goal is to get more users aware of the token and trade for it when it gets listed on an exchange.
How do crypto airdrops work?
Airdrops can be done in many methods
- Crypto tokens are automatically distributed to wallets with a minimum balance of another crypto token. For example, a new project might airdrop crypto tokens to every wallet address with 0.2 BTC or more.
- Some crypto projects might also take blockchain snapshots at a specific time. Any user with the right balance at that time may be eligible for the airdrop.
- Users can also receive crypto airdrops by claiming them with no strings attached.
Any airdrop aims to increase the adoption of the crypto token. The project will find the method based on the number of users expected to interact with the airdrop.
Types of airdrop
Standard airdrop
Users communicate their interest in receiving crypto tokens directly to the project; this is the simplest form of an airdrop. This request could be through Twitter or an official website. In such cases, users are only to provide their wallet address.
This airdrop is the most popular form as there are no requirements to complete. They are free crypto tokens for participants. A limited number of crypto tokens are always available through this method and it has proved to be very popular. Users may also have to enter a lucky draw to be picked to receive this crypto reward.
Bounty airdrop
Unlike standard airdrops, this form of airdrop requires users to complete some tasks. However, these tasks are not complicated, and users only have to engage with the community. For example, follow a social media channel, participate in their forums, or sign up for project updates.
Tokens received from this type of airdrop are not free as standard airdrops users pay with their time or privacy. All users are eligible to earn crypto tokens that they are interested in.
Holder airdrop
This form of airdrop depends on users’ holding of another token. This type of airdrop is because the project assumes you are an active crypto user if you own another crypto token. However, this type of airdrop mainly happens when a project launches a new crypto coin and wants to reward its long-time users who already own old tokens of the project.
For example, the creators of Bored Ape Yacht Club, Yuga Labs, airdropped their new crypto token, Mutant Serum, to all owners of BAYC NFTs. This new token created a new kind of NFT known as Mutant Ape Yacht Club (MAYC) by interacting with the old crypto tokens.
How to get crypto airdrops?
Many Twitter accounts and websites post updates on upcoming crypto airdrops. Following reliable sources is one of the best ways to find out about future and ongoing airdrops that users might be interested in. These sources enable users to research a project they are interested in before they sign up for the airdrop.
Receiving airdrops is usually a straightforward process. Users include their wallet address and other relevant information when they sign up for an airdrop. Tokens are automatically added to users’ wallets without the need to accept them, but only if they are selected to receive crypto tokens by the project.
Types of airdrop scams
- Phishing attack: Criminals and hackers may announce fake airdrops that lead users to fraudulent websites. Users risk losing their funds if they enter any information on such websites. Criminals can access their wallets using this information.
- Dusting attack: Criminals send small amounts of funds to users’ accounts in a dusting attack. They then try to track the wallet activity to find the wallet user’s data and violate their privacy.
How to avoid airdrop scams?
- Any random funds found in your wallet should be treated with caution. This addition might be a scam if you have not signed up for any project.
- Users must do their research on a company or project before linking their account to receive an airdrop.
- Users must not share their private keys or seed phrases with others online.
- Some scams ask users to send a small amount of crypto to an account to qualify for a crypto airdrop. Legitimate projects never ask for tokens to complete their airdrop.
- Users can create a new account to accept airdrops. This way, users can diversify their risks by keeping their primary accounts separate.
- Always carefully check offers or promotions that promise ‘Win free tokens’ or ‘Earn free tokens.
Can we make money from airdrops?
Users usually do not make much money through these airdrops. These airdrops are used as a marketing strategy to increase awareness of the newly launched crypto tokens. Usually, users receive small amounts through these airdrops.
Crypto airdrop pros and cons
Are crypto airdrops safe?
Crypto airdrops are safe if users do research on projects before enabling their wallet to receive their airdrops. Users must perform due diligence to ensure their private information and finances are secure online.
Final Thoughts
Crypto airdrops are usually used as marketing strategies to bring more attention to new crypto tokens before they go live. Airdrops are a unique form of advertising for new crypto, similar to handing out free samples or receiving coupons in the mail. Additionally, airdrops enable users to be a part of an exclusive group that can enhance their social status. Users must do their due diligence and research the project before linking their wallets to receive the airdrops. Performing due diligence before investing in a project helps users to keep their private and wallet information secure.
Know more about the latest updates in Crypto on ZebPay blogs.
