What Is A Crypto Airdrop: Complete Guide

In an increasingly saturated crypto market, where new tokens and digital assets emerge constantly, companies are employing various strategies to stand out. One notable marketing approach is the “airdrop.” These can range from distributing bonus tokens to unveiling entirely new NFT collections. But what exactly is an airdrop, and how does this popular crypto tactic function?

What Does Airdrop In Crypto Mean?

A crypto airdrop functions as a strategic marketing maneuver, directly distributing digital tokens into users’ wallets. These distributions can occur freely or in exchange for minor tasks, such as following a company’s social media account or retweeting a post. The overarching aim of these airdrops is to significantly boost the awareness and widespread availability of a particular token among the general public.

Typically, these airdrop campaigns are conducted prior to an Initial Coin Offering (ICO). The underlying goal is to familiarize a larger user base with the crypto token, thereby encouraging greater trading activity once it eventually gets listed on a crypto exchange.

How Do Crypto Airdrops Work?

Airdrops can be conducted using several different methods:

• Minimum Balance Requirement: Tokens may be automatically distributed to wallets that hold a minimum balance of another specific crypto asset. For example, a project might send tokens to any wallet address containing 0.1 BTC or more.
• Blockchain Snapshots: Some projects capture a “snapshot” of the blockchain at a particular date and time. Users who held eligible balances at that precise moment are then considered qualified to receive the airdrop.
• Claim-Based Airdrops: Users can sometimes receive airdrops with no specific prerequisites simply by actively claiming them.

Regardless of the method, the core objective of any airdrop is to increase adoption and engagement. The platform determines which method to utilize based on its strategy for encouraging users to interact with the airdropped tokens.

What are the Types of Airdrops?

Standard Airdrop 

This represents the most straightforward type of airdrop, where individuals express their desire to receive tokens, often by registering on the project’s website or Twitter page. For the majority of these airdrops, participants simply need to provide their wallet address.

These “no-strings-attached” airdrops are highly favored by users due to the absence of any prerequisites, essentially offering free crypto tokens. However, given their popularity, the quantity of tokens distributed via this method is typically limited. Consequently, users may need to participate in a lucky draw or be randomly selected to receive these highly sought-after tokens.

Bounty Airdrop 

Unlike basic airdrops, this method requires users to complete specific tasks. These tasks are typically straightforward and focus on engaging with the project’s community. For instance, you might need to sign up for project updates, follow their social media channels, or actively participate in their online forums.

While these tokens aren’t entirely “free” in the same way as standard airdrops, as you invest either your time or some level of personal information, this method still provides a viable path to earning tokens you’re interested in.

Holder Airdrop

This airdrop method is contingent on users holding a specific amount of another crypto token. In some cases, holding a particular token might simply signify an active crypto user. However, this strategy is most frequently employed when a crypto project introduces a new coin and aims to reward its loyal, long-term supporters who already possess older tokens from the same ecosystem.

A prime example of this is when Yuga Labs, the creators behind the Bored Ape Yacht Club (BAYC), airdropped a new token called “Mutant Serum” to all existing holders of BAYC NFTs. This new token then interacted with their held NFTs to generate an entirely new type of NFT known as the Mutant Ape Yacht Club (MAYC).

How to Get Crypto Airdrops?

You can discover upcoming crypto airdrops by following various websites or Twitter accounts dedicated to announcing them. This provides a reliable method for staying informed about current and future opportunities that might interest you, allowing for prior research into a project before committing to sign up for an airdrop.

The process for receiving an airdrop is typically simple: you provide your wallet address and any other requested relevant information when you register. If the project selects you to receive tokens, the airdropped coins are automatically deposited into your wallet without requiring any further action on your part.

Airdrop Crypto Scams

Types of Airdrop Scams

• Phishing Attack – Sometimes, malicious actors may announce fake airdrops that lead to fraudulent websites. Entering your information on such websites may give scammers access to your crypto wallet and lead to you losing your funds.

Read more: What is a Phishing Attack in Crypto?

• Dusting Attack – In a dusting attack, scammers send a very small amount of funds to your account in a token of their choice. They then track the transaction activity of your wallet to try and break your privacy and find the wallet owner’s personal information.

How To Avoid Airdrop Scams?

• Always be wary of any random funds added to your wallet. If you have not signed up for any airdrops then this random addition may be a scam.
• Do your own research on any project or company before linking your account for an airdrop. 
• Never share your seed phrase or private keys with anyone online.
• Some scams may ask you to send a small amount of crypto to their account to qualify for an airdrop. Legitimate airdrops will never require any tokens from you to complete the airdrop. 
• Try creating a new account to accept airdrops. Keeping your primary account separate may help you diversify your risk. 
• Always double check offers which promise “Earn free Crypto” or “Win free Crypto”.

Read more: What are Crypto Scams?

Can You Make Money From Crypto Airdrops?

You usually cannot make a lot of money through crypto airdrops. These airdrops are only intended to increase public awareness of the token as a marketing strategy. Therefore, the amount you receive during the airdrop is very small. 

Crypto Airdrop Pros and Cons

Are Crypto Airdrops Safe?

Provided you conduct thorough research on any project before linking your wallet or participating in its airdrops, these activities can be considered safe. It is paramount to exercise due diligence to safeguard your online information and finances.

Final Thoughts

Crypto airdrops offer a distinctive method for generating attention around token offerings before their official launch. Much like distributing free product samples or mailing out coupon codes, airdrops serve as a form of advertising. Furthermore, exclusive airdrops can confer a sense of belonging to an elite group, potentially enhancing a user’s social standing within the community. Nevertheless, it is paramount to conduct comprehensive research on any project before participating in its drops to ensure the security of your wallet and private information.