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Understanding Crypto Airdrops: Freebies in the World of Cryptocurrencies

What are Airdrops in Crypto

Newcomers frequently come across a wide range of unfamiliar terms and concepts in the vast world of cryptocurrencies. A case study of a term that could cause some pause is airdrops in crypto.

What are Airdrops and what they are important to? Let’s explore this subject in detail.

What are Airdrops in crypto?

To put it simply, airdrops are when certain users receive free tokens or cryptocurrency sent to their wallets.

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Typically, blockchain projects use these distributions as a marketing tactic or to bootstrap their communities.

It is similar, in general, to getting free samples or promotional stuff in traditional marketing.

 

Purpose of Airdrops in the Crypto Space

Their purpose can be read in several ways since airdrops benefit many stakeholders in the ecosystem of cryptocurrency. Listed below are some major goals of airdrops,

  • Community building

Blockchain projects can use airdrops as a very effective tool to develop and expand their communities.

Projects encourage people to become early adopters, supporters, as well as promoters of their platform by giving away free tokens to users.

Participants’ sense of loyalty and belonging is increased as an effect of this community engagement, which is important for the project’s long-term success.

  • Token distribution

Airdrops in crypto support the tokens’ distribution to a larger group of users.

Projects may use airdrops to guarantee a fairer distribution of tokens rather than depending exclusively on private sales or ICOs (Initial Coin Offerings), which might not be available to certain people or geographical areas.

Increased network durability and decentralization are helped by this wider ownership base.

  • Marketing and awareness

Airdropping free tokens is a low-cost marketing strategy that blockchain projects can use to raise awareness and visibility.

Airdrops generate excitement in the cryptocurrency world and draw interest from users, developers, and possible investors.

They act as a way to set themselves apart from other companies and launch fresh efforts, features, or goods into the market.

  • User acquisition and retention

Users are encouraged to interact with a project’s ecosystem through airdrops in crypto.

Projects can improve user engagement and retention by attaching conditions to involvement, like following social media accounts or joining a Telegram group.

This helps the project reach a wider audience by speeding up organic growth and gaining users.

  • Bootstrap network effects

In a blockchain ecosystem, airdrops may trigger network effects. The network grows more valuable and attractive to new users as more people join and have tokens.

A more robust ecosystem is the result of this positive feedback loop, which supports the network’s expansion and acceptance.

  • Token utility and governance

Utility tokens are frequently introduced through airdrops in crypto and have specific uses within the ecosystem of a project.

Access to platform features, the ability to vote on governance issues, and incentives for performing part in network activities could all be made possible by these tokens.

Users are encouraged to be involved in the platform’s development and governance by receiving airdropped tokens.

 

Types of Airdrops

In the cryptocurrency world, airdrops in crypto can take many different forms, each with unique features and objectives.

These are a few typical kinds of airdrops,

  1. Standard Airdrops
  • These airdrops include providing free tokens straight to the qualified wallets that take part in it.
  • These standard airdrops are mostly carried out in link with marketing campaigns to highlight brand new crypto or blockchains.
  • Some requirements like holding some cryptocurrency in their wallet or fulfilling some actions such as following social media accounts, and joining a telegram group, might apply to attendees.
  1. Hard Fork Airdrops
  • When a blockchain experiences a major protocol change that creates a new cryptocurrency, this is referred to as a hard fork airdrop in crypto.
  • Depending on their holdings at the time of the fork, owners of the original cryptocurrency receive an equivalent amount of the new one.
  • In simple terms, hard fork airdrops are a way for blockchain projects to provide tokens to current owners while making network upgrades or modifications.
  1. Exchange Airdrops
  • When crypto exchanges provide their users with free tokens, which are Exchange airdrops.
  • Sometimes, the purpose of these airdrops is to motivate users to trade on the platform or to draw attention to a current listed crypto.
  • Users should need to fulfill specific holding or trading volume requirements to be eligible to receive free tokens and airdrops exchange.
  1. Snapshot Airdrops
  • In a snapshot airdrop in crypto, a picture of a blockchain is taken at a particular block height or moment, and holders are given free tokens based on the balances shown in the snapshot.
  • Blockchain projects frequently use snapshot airdrops to reward devoted users or to evenly split tokens among current holders.
  1. Forkdrop Airdrops
  • When crypto splits, a new blockchain, as well as a coin, is created, this is when forkdrop launches.
  • This airdrop in crypto involves providing free tokens to owners of multiple cryptos even including the original crypto and its forks.
  • This is compared to hard fork airdrops that provide free tokens of the new crypto to holders of the original crypto.
  1. ICO Airdrops
  • Airdrops are a possible component of some initial coin offerings (ICOs) token distribution plans.
  • In such a case, free project tokens could be given out as an extra perk or incentive to ICO contributors.
  1. Bounty Airdrops
  • Free tokens are given out as part of bounty airdrops to users who support the growth or promotion of a blockchain project.
  • By completing tasks like writing documents, making videos, or translating project materials, participants can gain tokens.

 

How to find Airdrop opportunities?

For up-to-date information on coming airdrop in crypto opportunities, keep a watch on cryptocurrency news websites, forums, social media channels, as well as specialized platforms.

Using their Telegram groups, a lot of blockchain projects promote airdrops and instructions. Announcements about airdrops may be used ahead of time if you join these groups.

In many cases, to be eligible for airdrops, participants must follow the official accounts of the projects on social media platforms like Facebook, Twitter, and Reddit.

Certain coins or tokens listed on an exchange’s platform may be eligible for airdrops in crypto. Look for airdrop possibilities by following exchange announcements.

Crypto Airdrops

 

Airdrops in crypto eligibility criteria

  • The majority of airdrops in crypto demand that users have a cryptocurrency wallet that is compatible. Make sure the tokens being distributed in the airdrop are supported by your wallet.
  • Certain airdrops order that participants have a particular cryptocurrency in their wallet at the moment of distribution or snapshot. Make sure that you fulfill the project’s holding requirements.
  • Participants in some airdrops might need to finish KYC steps to confirm their identity. For airdrops carried out by regulated projects or exchanges, this is frequently the case.
  • To be eligible for airdrop, users in some projects might need to fulfill requirements like joining social media accounts, attending telegram groups, or referring to friends.
  • Geographical restrictions can apply to some airdrops meaning that users from specific countries or areas might not be allowed to take part for regulatory or legal reasons.
  • Exchange airdrops may trading or holding volume requirements that users must meet to qualify for the free tokens.
  • When it comes to ICO airdrops in crypto, users might have to buy tokens or meet the rest requirements of the project to take part in the ICO.

 

How users can participate in airdrops?

  1. Follow instructions

After having found an airdrop opportunity and satisfied the requirements, carefully stick to the project’s instructions.

This could be filling out forms, sending wallet addresses, or signing up for accounts on particular websites.

  1. Be cautious

Watch out for frauds and phishing attempts that act as authentic airdrops.

Avoid disclosing private keys or passwords, and make sure the airdrop is legitimate at all times.

  1. Stay organized

Maintain a record of the airdrops in crypto you have taken part in, mentioning the assignments you finished, the due dates as well as planned distribution dates.

This helps guarantee that you do not miss out on any rewards and helps you stay organized.

 

Successful airdrop campaigns and their impact

  1. Stellar Lumens (XLM) Airdrop

The Stellar Development Foundation scheduled in 2017 among one of the largest crypto airdrop campaigns ever.

100k billion XLM tokens worth billions of dollars at the time were distributed to users of the Bitcoin blockchain.

The Stellar network and its potential for affordable as well as simple international transactions have raised more attention from the general public due to this airdrop.

It is distributed to the growth and usage of Stellar by enlarging the community and providing incentives for users to explore and engage the platform.

  1. EOSIO (EOS) Token Distribution

One billion EOS tokens were distributed during a year-long token distribution event hosted by Block.one.

The company was in charge of the EOSIO blockchain protocol in 2018. In a daily auction format, participants could claim EOS tokens for distribution based on their Ethereum holdings.

This EOSIO token distribution campaign grabbed the excitement and interest of the crypto community.

By raising the EOS ecosystem to the top of the rankings for smart contract and decentralized application (dApp) platforms. It draws thousands of investors and developers.

  1. Uniswap (UNI) Governance Token Airdrop

When Uniswap airdropped UNI at that time Decentralized trade users were surprised, each qualified user gained 400 UNI tokens, worth hundreds of dollars at the time of supply.

The Uniswap airdrop had a necessary influence on the DeFi market. It motivated traders, liquidity providers, and Uniswap platform users to take part actively in the platform oversight and decision-making process.

The airdrop in crypto helped in UNI rapid growth and strengthened its position as the leading decentralized exchange protocol.

  1. Filecoin (FIL) Mainnet Airdrop

In Oct 2020, FIL tokens were distributed as part of the airdrop to qualified users who had previously supported the FIL project through mining, community-building purpose, and development.

This Filecoin network was started and early supporters and contributors were rewarded with FIL through the airdrop.

It made FIL tokens more liquid and promoted the growth of a decentralized storage ecosystem. Along with developing community building and encouraging involvement in network operations and governance, the airdrop improved Filecoin.

Final Note

In the crypto ecosystem, airdrops in crypto are necessary because they promote community development, project visibility as well as distribution of tokens.

Although they give users the chance to get free tokens, it is necessary to approach them carefully in light of potential scams and regulatory effects.

Through an understanding of airdrop operations and careful investigation, people can more skillfully travel this sector of the cryptocurrency landscape.