What are Crypto Airdrops?
In recent years, crypto airdrops have become a popular marketing strategy in the cryptocurrency industry. But what exactly are crypto airdrops, and how do they work? In this article, we will explore the basics of crypto airdrops, their benefits, and the best practices for participating in them.
What are Crypto Airdrops?
While crypto airdrops can have several implications, most commonly it’s a marketing strategy involving giving away free cryptocurrency tokens to an audience of people for various reasons. Airdrops are typically used to raise awareness for new crypto projects or to reward loyal users.
The term "airdrop" comes from the traditional practice of delivering supplies to people in remote or hard-to-reach areas via airplane. In the cryptocurrency world, an airdrop is a way to distribute tokens to a wide audience, without requiring recipients to pay for them.
How it works
Crypto airdrops work by distributing free tokens or coins to a large number of people who meet certain criteria. These criteria can vary depending on the project, but typically include:
- Holding a certain amount of a specific cryptocurrency
- Following a project's social media accounts
- Referring new users to a project
- Completing certain tasks or actions, such as filling out a survey or writing a review
When an airdrop commences, recipients receive the free tokens or coins in their cryptocurrency wallet.
Benefits of Airdrops for projects
- Raise awareness for new projects
- Build a loyal user base
- Generate hype and buzz around a project
- Encourage users to try new products or services
- Increase trading volume and liquidity
Benefits of Airdrops for users
- Receive free tokens or coins without having to pay for them
- Get early access to new projects and services
- Have the potential to profit from the tokens or coins if their value increases
- Participate in a community and engage with a project's team and other users
- Best Practices for Participating in Crypto Airdrops
If you're interested in participating in a crypto airdrop, there are some best practices to always keep in mind.
Do your research: Before participating in an airdrop, make sure to research the project and its team to ensure its legitimacy and reputation, as should be done with all tokens. Be wary of scams and phishing attempts.
Follow instructions carefully: Airdrops often have specific criteria that must be met in order to receive tokens or coins. Make sure you follow the instructions carefully and double-check your work before submitting it.
Use a secure wallet: Make sure you use a secure cryptocurrency wallet to receive your airdrop tokens or coins. Avoid using exchange wallets, as these are not as secure and could potentially result in your tokens being lost or stolen.
Keep track of your airdrops: If you participate in multiple airdrops, it's important to keep track of them all and monitor your wallet for new tokens. Some airdrops may have expiration dates or other requirements that you need to be aware of.
Don't share your private keys: Never share your private keys or seed phrases with anyone, as this could result in your cryptocurrency being stolen. Legitimate airdrops will never ask for this information.
Some of the biggest Airdrops in history
Uniswap (UNI) - In September 2020, Uniswap launched its governance token, UNI, and airdropped 400 UNI tokens to each user who had interacted with the platform before September 1, 2020. At the time, the total value of the airdrop was around $1,200, but the value of UNI has since increased significantly, making it one of the largest airdrops ever.
Filecoin (FIL) - In October 2020, Filecoin conducted an airdrop of 45 million FIL tokens to users who had participated in its ICO in 2017. At the time, the total value of the airdrop was around $200 million.
Stellar Lumens (XLM) - In 2017, Stellar Lumens airdropped 19 billion XLM tokens to users of the cryptocurrency wallet service, Blockchain.info. At the time, the total value of the airdrop was around $125 million.
Spark (FLR) - In December 2020, Flare Networks conducted an airdrop of Spark (FLR) tokens to XRP holders. The total value of the airdrop was estimated to be around $6 billion at the time.
OMG Network (OMG) - In September 2017, OmiseGo conducted an airdrop of 5% of its total token supply to holders of Ethereum. At the time, the total value of the airdrop was around $100 million.