What is a crypto airdrop?
A crypto airdrop is a marketing approach that involves the release of new cryptocurrency tokens for free in order to swiftly raise awareness and build communities. It can also serve to establish an early value for a token by allowing participants to trade their airdropped tokens. As a result, businesses that want to fund their crypto projects typically use airdrops. The announcement of a forthcoming airdrop is frequently made on a cryptocurrency project’s website, Medium page, or third-party airdrop tracker, and then broadcast across social media channels where a large number of cryptocurrency fans can view it.
An airdrop includes the distribution of tiny amounts of newly created cryptocurrency to members of a certain blockchain platform. For example, cryptocurrency firms may distribute money to NEO, Ethereum, or Bitcoin wallet holders.
Why does crypto airdrop exist?
The fundamental goal of a crypto airdrop is to raise awareness of a blockchain startup, initiative, or service. The team may bootstrap its project and ensure a fair distribution of tokens among its community from the start by issuing tokens to users. Furthermore, once the token begins trading on an exchange, recipients of these tokens are incentivized to raise awareness and help the project reach a larger audience. The greater the interest in the token, the more likely it will appreciate in value.
Promoting the launch on a project’s website, cryptocurrency forums, and social media is a common way for airdrops to gain popularity. This is similar to receiving a coupon in your inbox with a discount code, as both campaigns are aimed to entice more people to use the platform by offering a monetary incentive.
What are different types of airdrop?
There are four main types of crypto airdrop, let’s discuss each of them briefly:
Standard airdrop
As a marketing strategy, a standard cryptocurrency airdrop transfers a certain amount of native coins or tokens into existing wallets. It is usually done to promote the brand and encourage more people to adopt the asset, which is usually done during the initial coin offering. In most cases, all you need to do is create an account with the new project and provide your wallet address during the distribution event.
Bounty airdrop
Bounty airdrops are a marketing approach, however, consumers must participate in some type of promotional activities in order to obtain the digital item.
These activities could include using Twitter or other social media networks to share a post about the blockchain project, Subscribing to the project’s e-newsletter, or joining a discussion and participation forum for the project.
Getting a free token through a bounty airdrop requires a little more effort than a typical airdrop, although the activities are usually not strenuous.
Exclusive airdrop
An exclusive airdrop distributes cryptocurrency to a select set of people who subscribe to an airdrop aggregator. These third-party websites share information about promising crypto projects and anticipated airdrops.
Holder airdrop
People who have a certain quantity of another cryptocurrency in their wallets are eligible for a holder airdrop. Typically, a crypto project takes a snapshot of crypto holdings on a given date and then allows users to claim an airdrop depending on their ownership at that moment.
How do crypto airdrops scam works?
Airdrops aren’t always beneficial. As a result, be cautious about which airdrops you sign up for. To begin with, any airdrop that needs you to transfer money to the initiative is almost probably a scam. It’s not a good idea.
Second, some airdrops are merely vehicles for obtaining personal information from you, and “dusting” attacks, in which you receive a fractional quantity of cryptocurrency into your wallet and so give your public address to a potential scammer or hacker, are widespread. Once a project has your public address, its members can use blockchain explorer tools to check your portfolio.
If you have a significant amount of crypto assets on that wallet address, you could be the subject of phishing, SIM swapping, and other hacking attempts, as well as real-life extortion and violence.
As a result, it’s advisable to make a second wallet just for airdrops. This is a straightforward procedure. To receive airdrops, simply create a new address on MetaMask or MyEtherWallet, as most airdrops occur on the Ethereum network as ERC-20 tokens.
Conclusion
Airdrops are a relatively harmless marketing ploy designed to provide community rewards for new projects and their early backers. While they may appear insignificant at first, they could end up being extremely valuable to crypto newbies or enthusiasts eager to get in on the ground floor of potential initiatives without having to invest any funds. Always be wary of phishing sites, bookmark reliable websites, use various wallet addresses for different airdrops, and never, ever send money to get an airdrop.