All you need to know about Airdrops
All you need to know about Airdrops
In the world of cryptocurrencies, there is a unique marketing ploy in which a number of coins or tokens are sent to their cryptocurrencies to inform users about a new virtual currency; this trick is called airdrop. In fact, in this method, small amounts of a new virtual currency are sent to the wallets of active blockchain users. These donation amounts are usually given to users free of charge or in exchange for participating in the advertisements of a cryptocurrency by doing things like republishing the content of the cryptocurrency creators.
Airdrop is falling from the sky
The recipient of AirDrop donation tokens, in some cases, must already have small amounts of the same tokens in their wallet. Usually, users must do certain things to receive donation tokens, such as republishing promotional content, writing blog posts, or communicating with the developers of those tokens.
What is AirDrop in cryptocurrency market?
One of the uses of digital currencies is to make money through Airdrop. Airdrop digital currency is a marketing tactic that utilizes the free distribution of new cryptocurrencies to quickly raise awareness and assist determine the initial value of a token, hence the start-ups that intend to launch their own cryptographic projects, and they usually use AirDrops. AirDrop news is usually shared on the website of a cryptocurrency project, third party AirDrop tracker or social media platforms that many crypto enthusiasts can view.
AirDrop includes small amounts of newly established digital currency and targets members of a blockchain platform, e.g. Cryptocurrency start-ups may transfer their currency password to NEO wallet holders, Ethereum network or Bitcoin. In some cases, the recipient may have to have a specific token or a minimum balance to qualify for AirDrop. For example, TRX holders will receive BTT continuously until February 2025.
In other cases, users may need to take steps such as posting a project on social media. Note that AirDrop cryptocurrencies differ from the initial public offering (ICO). An ICO is an individual investment application that the United States classifies as a securities offering. Often, an airdrop may be accompanied by an ICO or other means of raising funds.
Types of airdrops
Airdrops are divided into three general categories, which we will explain below:
Standard
If you register on a selected site or website, you will receive a gift currency password.
Holder
In exchange for keeping a currency code in your wallet for a certain period of time, you will be given a coin or token as a gift.
Bounty
In exchange for activities such as subscribing to the Telegram channel, retweeting, following selected pages, and the like, they receive rewards in the form of a currency code.
Why do crypto fans love AirDrop?
Most digital currency enthusiasts, especially those with small cryptocurrencies, love AirDrop because they think of AirDrop as a gift. In some cases, the value of this free money can suddenly increase over time and bring huge profits to these people. Airdrops usually benefit the project in the first place, but recipients of this free token can use it after a while; this is a win-win situation. Here are three samples of successful airdrops:
Unispwap (UNI)
In 2020, Uniswap, the world’s most popular decentralized trading platform (DEX), sent its core token, UNI, to all wallets that used the Uniswap platform and made at least one transaction before September 1, 2020. Each eligible account received 400 UNIs; Most participants in the event quickly traded their tokens for $2 to $4; Following the increase in the value of this token from $2 to $30 in April 2021, those who kept their currency code received a great reward for their patience and loyalty.
Uniswap cryptocurrency project sample
Ontology (ONT)
In 2018, Ontology Airdrop its native ONT token for NEO investors as well as subscribers to its newsletter. The event was intended to reward NEO blockchain users for their support in raising funds. The total amount of airdropped coins was $10 million, valued at approximately $42 million, at which time each coin was trading at $2.4. The token later rose to about $11 despite the bear market, bringing the value of airdropped tokens to $100 million.
1inch
In December 2020, 1inch sent 90 million tokens to more than 55,000 wallet addresses. Each address must have at least one $20 or four transaction to be eligible. The 1INCH was priced at around $2.7 at launch. However, in April 2021, it reached more than $6 and is currently trading at $99.2.
A specific address is said to have received about 10 million tokens (9749686) as a reward during this airdrop, which reached $4.60 million in April and increased by approximately $33 million in less than five months.
Five reasons why crypto Projects offer AirDrops
Cryptographic overdrafts are generous donations made to individuals through startup projects; yet as the ancients have pointed: “People give nothing for nothing!”؛ Therefore, there must be a justification for this. Let us look at the basic reasons for AirDrop to start cryptocurrencies.
Increasing awareness
Awareness raising is the main reason AirDrop for blockchain start-ups; in the early days of investing, ICOs were in the spotlight; however, problems arose for them, so that the influx of start-up’s, which often-contained duplicate white paper and to some extent plagiarism, saturated the market and confused investors.
Countries such as China also banned ICOs altogether and regulators such as the SEC began targeting ICOs in relation to US investors; therefore, new projects needed other attractive and legal methods to create enthusiasm among investors.
The answer was simple; Distribute free coins! The popularity of airdrops has caused many cryptocurrency supporters to get excited and try to collect airdrops. Anyone who is active in the field of cryptocurrencies on social media probably believes that the recipients of an air-up are one of the most important fans of a project. Develop their community more easily than before.
Reward users
It is a sad fact that many cryptocurrency investors focus only on high-profit projects and do not care about the long-term sustainability of a project; so they go from project to project, extracting their assets after the price pump without benefiting from that protocol. In fact, this type of behavior can damage a cryptographic platform.
To address this, some free coin start-ups only target loyal users who use their platform or keep a certain amount of tokens in their wallet periods.
Decentralization of token distribution
Investors may use their wealth and the low transaction prices of a coin in the early days to buy a significant amount of its supply, leaving large quantities of a coin in the hands of a small number of investors. At present, this phenomenon is one of the main drawbacks of Dodge Coin; in such cases, projects can use AirDrop to balance their token distribution.
Decentralization of token distribution
Attracting investments
Cryptographic airdrops are usually provided with tokens; an ingenious way to increase the accumulated capital without spending a lot of money on marketing is to use AirDrop because this strategy is tied to creating awareness. When a project uses AirDrop, the clutter helps raise its token price.
Especially in today’s online economy, where capital gains can be measured by a variety of metrics (such as Google search, social media brand attention, and the number of followers of a community on Twitter and Telegram), big investors or “whales” These analyzes are used to predict the prospects of a project. Thus, by significantly increasing the participation of a community, AirDrop can significantly increase the total capital of a company.
Usually when a currency code is dropped, especially after the ICO, it means it has the potential to improve. Members of the developer of this currency code can attract more attention by applying AirDrop. The more attention is paid to a digital currency, the more determined users become to invest in it and AirDrop can be considered as a successful strategy.
Learn more about your community
As a reward, AirDrop allows projects to collect personal data from cryptocurrencies because some of them request forms for personal information such as email, social media address, and so on. Using this information, a project team can launch targeted marketing campaigns.
Other free digital currency tools
Of course, airdrops are not the only way to get free passwords; for example, you can have special coins such as ONT and NEO to request native ONG and GAS tokens at specified intervals. You can also use DeFi techniques such as cryptocurrency or farming to gain new digital incentives or government tokens. When joining new exchanges, you can visit various sites that offer invitation and registration bonus codes.
Although all of these tools give you “free” funds, first they need to invest and own certain assets or deposit in a centralized trading or exchange app. If you want to invest in cryptocurrencies, these tools can go a long way in improving or even doubling the value of your initial investment. Remember, once the value of your initial investment has doubled, you can sell 50% of it and keep the remaining 50% worriless.
Beware of phishing and dusting attacks!
Cryptographic scams will become very complicated in 2021 and will deceive even experienced investors; Please be very careful when searching for any passwords or projects on Google. Fake sites usually pay search engine advertising and social media to get victims’ attention.
Even an accidental mistake in typing the address of an exchange can lead you to a fake site. If in doubt, bookmark CoinMarketCap.com, search for a project on this website, and use the URL listed as a verification tool.
How to reduce airdrop risks
Not all airdrops are benign, so be very careful which one you sign up for. First of all, if AirDrop requires you to send any cost to your project, it is definitely a scam; Second, some airdrops are a tool for receiving your personal information and performing “dusting” attacks.
In this way, a small amount of passwords is first sent to your wallet and as a result, your public address is revealed to a potential swindler or hacker. Once a project gets your public address, its members can easily check your portfolio through the blockchain explorer tool.
As most airdrops are performed as ERC-20 tokens on the Ethereum network, simply create a new address in MetaMask or MyEtherWallet. To stay up to date with the latest AirDrop, it is recommended that you follow 10 AirDrop information sources.
In conclusion
AirDrop is a marketing ploy used to motivate the community to profit from new projects and their initial sponsors. Although at first they look like small children, they can be of great benefit to beginners or crypto enthusiasts looking to start promising, low-cost projects in the end. Remember; watch out for phishing sites, bookmark trusted sites, and use different wallet addresses for your airdrop. Never send money in exchange for a gift.
Bitcoin and Altcoins Airdrops
FAQs
What is the role of AirDrop in decentralizing cryptocurrencies?
After AirDrop, the cryptocurrency shared among eligible people, making access to these digital currencies not limited to a handful.
Is AirDrop legal?
In some countries, some common practices in the cryptocurrency market have been banned. For example; In China, ICOs are illegal; But AirDrop is not banned anywhere in the world.
How to get a coin or token in an AirDrop project ?
Each project, depending on its type (Standard, Bounty or Holder) uses a special method for giving a currency code. You can learn how to receive coins and tokens on AirDrop provider websites and by searching on virtual networks.
