AirDrop, in digital currency trading, is a marketing ploy that involves sending coins or tokens to the wallet address to raise awareness of a new virtual currency. Small amounts of new virtual currency are sent to the wallets of active members of the Blockchain community for free or for a small service, such as a retweet of a post sent by a currency exporter. In this article, we will talk about what is Airdrop crypto and how it works.
What is AirDrop crypto?
Airdrop is a promotional activity typically done by blockchain-based startups to help launch a virtual currency project. Its purpose is to raise awareness about the digital currency project and to encourage more people to trade at the time in the exchange as the initial supply coins (ICO).
Airdrops are usually advertised on the company’s website as well as in digital currency forums, and coins or tokens are sent only to current holders of cryptocurrencies, usually bitcoins or Ethereums.
To be eligible for a gift, a recipient may need to keep a minimum amount of encrypted coins in their wallet. On the other hand, they may need to do something specific, such as posting about currency on a social media community, connecting with a specific member of the Blockchain project, or writing a blog post.
A legal cryptocurrency never seeks to invest in a currency. Its purpose is purely advertising. On the other hand, some cryptographic scams involve sending very small amounts of Bitcoin or other digital currencies to unsuspecting recipients, known as dust scams. Users should always be on the lookout for unwanted deposits in their cryptocurrencies.
What is Airdrop crypto: Advantages and Disadvantages of Cryptocurrency Airdrops
If you want to know what is Airdrop crypto, you should first know Due to the fierce competition between digital currency startups, AirDrop is an attempt to stand out from the crowd. Some businesses dedicated to crypto airdrops provide alerts to users and list services for startups, in addition to a set of marketing services to fine-tune their airdrops. As always, there is good and bad business in this space.
In a post on the CoinDesk blog, Michael G. Casey, Chairman of the CoinDesk Advisory Board and Advisor to the MIT Blockchain Initiative, argued that some form of marketing is essential to the success of a digital currency. “A currency is nothing if it is not widely used. And it will not be achieved unless people make costly efforts to encourage widespread use,” he wrote.
However, there are warnings about digital currency airdrops from others in the industry. For example, Pierre Richard, co-founder of Bitcoin Consulting, tweeted that crypto airdrops could be pump and drain designs. This means that digital currency owners can artificially increase its value to make a quick profit.
“Beware of scams like this: 1. Get extra tokens for yourself and your friends right away,” Richard tweeted. Swap pre-mined tokens to increase prices. Chips 4. Retail announces tokens to you.
What are the different types of airdrops?
Now you know what is Airdrop crypto and what Advantages and Disadvantages it has. So Crypto projects may offer free crypto in a variety of situations, although their main motivation is to encourage users.
The most common types of airdrops you see are:
- Standard AirDrop
- Bondi AirDrop
- Exclusive AirDrop
- Airdrop Holder
What is a standard airdrop?
A standard airdrop digital currency transfers some native coins or tokens to existing e-wallets as a marketing strategy.
This is usually to promote the brand and encourage more people to accept the asset, often during the initial coin offering.
Generally, all you have to do is sign up for an account with the new project and provide your wallet address during the distribution event.
What is a bounty airdrop?
Bounty airdrops are also a marketing strategy, but potential recipients must participate in some promotional activities to receive digital assets.
These activities can include the following:
- Share a post about the Blockchain project on Twitter or other social media platforms
- Sign up for the project email newsletter
- Join a forum to discuss and participate in the project
It takes a bit more work to get a free token through bounty AirDrop than standard AirDrop, but activities are usually not required.
What is an exclusive airdrop?
Exclusive AirDrop sends crypto coins to a group of people following a collecting AirDrop. These third-party sites share news about promising cryptographic projects and their upcoming AirDrop events.
What is a holder airdrop?
Holder airdrops are given to people who have some other digital currency in their wallets. Typically, a crypto project takes a snapshot of crypto assets on a specific date, then allows people to claim airdrop based on their ownership at the time.
Stellar, for example, is an encryption project that began in 2014. In 2016, its leaders announced a plan to spend $ 19 billion lumens (XLM), its native digital currency, to current Bitcoin (BTC) holders to honor them.
To receive a reward from Stellar airdrop, you would need to verify your BTC assets to request XLM.
What is Airdrop crypto: How do you receive crypto airdrops?
Crypto airdrops can be a great way to add to your digital currency portfolio without having to buy assets using Fiat currency.
Some ways to track crypto airdrop include:
- Perform regular online searches for crypto airdrop opportunities
- Follow airdrop aggregators and sign up for their exclusive airdrops
- Sign up for new platforms to use any standard AirDrop they offer
- Monitor future projects to prepare for graceful airdrops
Using Future AirDrop is more about keeping up with improvements and taking advantage of opportunities.
How do airdrop scams work?
If you are going to follow AirDrop, you need to protect yourself from AirDrop scams. These may include fraudulent airdrops or key fraudulent scams, in which fraudsters try to steal your money or private key under the pretext of giving you an airdrop of tokens.
Remember, never give away your private key or attach your wallet to an untrustworthy person. In some cases, fraudsters will even drop a fake token into your wallet, and you will not notice the scam until you can sell or trade it.
Consider studying project leadership, reading its public documents, and measuring the feelings of other investors before claiming AirDrop.
Why Crypto Supporters Love Airdrops
Most crypto enthusiasts, especially those with small or no crypto assets, like AirDrop simply because they see it as free money. And in some cases, these free currencies can increase over time or increase dramatically, generating huge profits with zero capital.
Initially, airdrops are usually more profitable for the issuing company, but recipients of free coins can be welcomed from time to time. This is a win-win situation. Here are three great examples of successful airdrops.
What is Airdrop crypto: 3 Lucrative Crypto Airdrops
Uniswap (UNI) Airdrop
In 2020, Uniswap, the world’s most popular decentralized exchange (DEX), introduced its core asset, UNI, to all wallets that used the platform and made at least one transaction before September 1, 2020. Received a qualified account of 400 units. From the underlying asset during the event, most recipients quickly dropped their airdropped tokens, and UNI handed out $ 2 to $ 4.
As the value of the exchange token with others in the DeFi ecosystem increases, those who “save their lives” (HODL) receive a great reward for their patience and loyalty, rising from $ 2 to $ 30 from April 2021. With steel hands, you are now sitting on a $ 12,000 nest egg from UNI alone (unfortunately, this author sold his airdrop tokens for $ 3!).
Ontology (ONT) Airdrop
In 2018, Ontology introduced its native digital currency, ONT, to NEO investors, as well as 1,000 ONTs for people who simply subscribed to its newsletter. To some extent, the event was intended to reward NEO blockchain users for their support during fundraising. The total number of coins sold was $ 10 million, valued at approximately $ 42 million, at which time $ 4.2 per coin was traded. The token later reached near $ 11 during a deeper downturn, bringing the value of the coins sold to $ 100 million. Unfortunately, that was the peak of sales, guys. ONT has since reached a lower value and is currently only $ 2.
In December 2020, 1-inch DEX sent 90 million 1INCH tokens to more than 55,000 addresses. To be eligible, an address must have traded at least $ 20 or made four trades before AirDrop Day. At launch, the 1INCH price is at around $ 2.7. Move forward until April 2021 and the coin will trade a little above $ 6.
There was a specific address that received 10 million insane tokens (9749686) in AirDrop history, as a reward for supporting it. The warehouse is currently at $ 60.4 million in April, an increase of approximately $ 33 million in less than five months.
5 Reasons Why Crypto Projects Do Airdrops
Crypto projects offer generous rewards through airdrops, as they are the biggest beneficiaries of such events. Let’s look at the basic reasons why crypto startups run airdrop programs.
Spreading awareness is the primary reason why blockchain startups conduct airdrops. In the early days of crowdfunding, ICOs took center stage. However, problems soon arose. A flood of startups emerged during this gold rush, often with only a flimsy and partially plagiarized white paper in hand, oversaturating the market and jading investors.
Countries like China also banned ICOs altogether, and regulators such as the SEC began targeting ICOs dealing with US domestic investors. Soon, new projects needed a more attractive and legitimate way to create advertising.
The answer was simple. Only deliver free coins. The popularity of AirDrop has led many crypto proponents to venture into the shilling and promote projects to get AirDrop and “pump up their luggage.” Anyone active in the social media encryption scene can probably agree that airdrop recipients are some of the strongest supporters a project can count on. For the crypto startups, this was a paradise-built contest, as it allowed them to grow their community organically by spending a small portion of their tokens.
It is a sad fact that many investors in the crypto ecosystem are only looking for the highest return on investment (ROI) and do not care about the long-term sustainability of the project. Thus, they jump from project to project, dump their heavy bags on the pump, and make huge profits from small investors behind, offering no real value to the protocol. This kind of behavior can damage an encryption platform.
To address this, some startups are launching airships to distribute free coins to reward loyal users who either use their platforms or keep a certain amount of tokens in their wallets for certain periods.
Decentralize token distribution
Investors with deep pockets may use their heterogeneous wealth and reasonably priced prices in the early days of a coin to allow them to hoard a significant amount of its supply. The problem is that large amounts of coins will concentrate in the hands of a small number, which is currently one of the main drawbacks of Dogecoin.
In such cases, projects can do AirDrop to balance the token distribution.
Crypto airdrops will often follow by token presentation, whether ICO, IEO, IDO, etc. A smart way to increase the capital raised without spending a lot of money on marketing is through airdrops. Because this strategy is related to creating awareness.
When a project is launched and an airdrop is done, the buzz created, if successful, helps to increase the price of a token, as most recipients reject projects to which it pays for free. Especially in today’s online economy, where any interactive metrics can be measured and used to attract investors, such as popular Google search terms, social media brands, and the number of followers on Twitter and Telegram, big investors or “whales”. Analyzes are used as a tool. Investment climate to assess the prospects of a project. Thus, AirDrop, which significantly increases community engagement, can seriously increase a company’s total capital for only a relatively small amount of tokens allocated to AirDrop.
Learn more about its community
As a bonus, AirDrop allows projects to collect data from the crypto community, as some require recipients to fill out a form that provides personal details such as email, social media, and views on cryptographic projects. With this information, a project team can conduct targeted marketing campaigns.
What is Airdrop crypto: Conclusion
Airdrops are a relatively harmless marketing ploy designed as a community incentive for new projects and their initial sponsors. They can ultimately be of great value to beginners or digital currency enthusiasts looking to embark on promising, low-cost projects.
If you had these 6 airdrops, you could have made a whopping $ 500,000 by now!
So why are you waiting? Just remember, watch out for phishing sites, bookmark trusted sites, use different wallet addresses for your AirDrop. Also never, ever send money to get AirDrop.