Cryptocurrency airdrops — chances are you have either heard about them or earned them before. But really, what are they? Are they free crypto, a marketing scope by new crypto businesses, or another fancy tech-thing that does not concern you?
If you are new to crypto or you are curious to know about airdrops, buckle up. In this guide, I will unbundle what are cryptocurrency airdrops? Make sure you read till the end to discover how this asset can benefit you. Let’s dive in!
KEY TAKEAWAYS:
- Cryptocurrency airdrops are a marketing strategy where a new project distributes free tokens or coins to people.
- Types of airdrops include standard, holder,bunty, exclusive, and hard fork airdrops.
- New projects give free tokens to drive awareness of their crypto.
- You can join relevant crypto communities and stay updated on crypto airdrop news to be a part of the next cryptocurrency airdrop event.
What Exactly Are Airdrops?
Blockchain projects use cryptocurrency airdrops as a marketing strategy to distribute free tokens or coins to people. Yes, it is indeed free. It is more like a digital giveaway to spread the word about their product.
Typically, you have to complete tasks like following certain social media accounts, signing up on the platform, and holding a particular crypto in your wallet to qualify. The ultimate goal is to increase awareness, drive engagement, and encourage people to use the new currency.
Types Of Airdrops
Not all airdrops are equal. They come in various forms depending on the project’s objective. Let us take a look at the main types of this class of crypto assets.
- Standard airdrops: Here, you get free tokens for completing basic tasks like signing up for an email list or creating an account on the platform.
- Holder airdrops: You receive an airdrop of a new token if you already own a specific cryptocurrency.
- Bounty airdrops: You would have to fulfill basic requirements such as sharing a post about the project and following the project’s social media accounts in return for tokens.
- Exclusive airdrops: These are rewards given to early adopters or loyal community members of a crypto project.
- Hard fork airdrops: This happens when a blockchain undergoes a hard fork that creates a new chain separate from the original one. As a result, holders of the original crypto receive free tokens of the new blockchain.
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Why Do Projects Give Away Airdrops?
Airdrops seem more like giving free money, which might seem like a confusing or wasteful concept. However, here are reasons why giving free tokens makes sense.
- To ensure marketing and awareness: Airdrops help new projects stand out because they create a lot of buzz that attracts attention.
- To promote user adoption: When people own crypto, whether it is free or not, they are more likely to talk about it. So, airdrops are seeds that eventually germinate into widespread adoption.
- To aid decentralization: Airdrops help projects distribute their coins across a wide range of users. This promotes decentralization by reducing the risk of one entity owning too many tokens.
- As a reward for loyalty: Airdrops are rewards that build loyal supporters and a strong community.
How Airdrops Work
While airdrops are free tokens or coins, they follow a clear process. Let’s briefly examine how it works.
- Announcement: A project announces its airdrops officially through its website, social media, or other crypto forums.
- Determination of the eligibility requirements: The project defines what makes people qualify for the airdrop.
- Taking snapshots: A snapshot of the blockchain is taken at a specific date and time to record users’ accounts and determine who gets the airdrop.
- Distribution: Eligible wallets receive the free tokens within a specified timeframe.
How To Find Cryptocurrency Airdrops
If you want to want to benefit from airdrops, here is how to spot upcoming ones:
- Follow social media announcements: Most airdrops are announced on platforms like Twitter, Reddit, and Telegram. You can follow reputable crypto projects and influencers to stay informed.
- Check airdrop aggregators’ websites: Check for lists of ongoing and upcoming airdrops on websites like AirdropAlert, Airdrops.io, and CoinMarketCap’s airdrop page.
- Join relevant crypto communities: Interact with crypto communities on Discord, Reddit, or Telegram to get airdrop updates.
- Keep tabs on the latest crypto news: Monitor crypto news platforms frequently so you do not miss out on airdrop announcements.
Practical Tips To Remember When Participating In Airdrops
Airdrops are a great way to earn free crypto, but they also come with potential risks. You can do the following to protect yourself from crypto scams and other possible dangers.
- Never share your private keys: Legitimate airdrops will never ask for your private key. Run away from any project that asks for your private key; it is a scam.
- Use a separate wallet: Create a new wallet specifically for receiving airdrops to keep your main crypt safe in case anything fishy happens.
- Research on the project: Investigate a project’s authenticity before participating in its airdrop.
- Be cautious of phishing scams: Always verify URLs and email sources because phishing scams can impersonate credible crypto projects.
- Be mindful of gas fees: Some airdrops require you to claim a token, which might involve paying network fees. If the fees are more than the coin’s value, it is not worth your effort.
Conclusion
What are cryptocurrency airdrops? In simple terms, they are an invitation to be a part of a new project’s growing community. However, just like with anything in the crypto space, it comes with its own risks and rewards. As such, it is best to understand how airdrops work so you can enjoy genuine benefits without compromising your personal safety.
Reference
- builtin.com – What Is a Crypto Airdrop?
- cointelegraph.com – What is a crypto airdrop, and how does it work?
- investopedia.com – Cryptocurrency Airdrop: What Is It and How Does It Work
