What’s A Crypto Airdrop?

An airdrop is a distribution of a cryptocurrency token or coin, usually for free, to numerous wallet addresses. Airdrops are primarily implemented as a way of gaining attention and new followers, resulting in a larger user-base and a wider disbursement of coins.

By now, most of us are aware of the many cryptocurrencies around us. While the debate upon their use continues, more and more people are getting involved in the crypto world. With this, come more players in the industry and their need to gain traction for their blockchain-based service. A cryptocurrency airdrop has become a very important tool for the same.

So, what is an airdrop? In essence, an airdrop is just what you have seen in the many games you play online, a promotional giveaway to players to keep them engaged. Crypto airdrops do this by giving away free crypto coins or tokens related to the service. In return, they usually ask the participants to promote their service on various social media platforms.

There have been numerous airdrops to date, with several of them still lined up for the coming weeks. Most cryptocurrency investors have had an encounter with one or the other platform’s airdrop in the past. In case you have too, but are not quite sure what it means, here is your guide to understanding what crypto airdrops are and how they work.

Therefore, Crypto Airdrop is a marketing strategy being followed by blockchain-based services. To understand it clearly through an example, imagine if a new cryptocurrency exchange like Binance or WazirX is going to open up soon. In order to gain maximum eyeballs within the cryptocurrency world, the platform launches its own virtual currency, like WazirX has WazirX Token or Binance has Binance Coin.

How do you receive an airdrop?

Since the airdrop involves a transfer of cryptocurrencies, it needs the participants to have a cryptocurrency wallet. These are the same wallets where you store Bitcoin, Ethereum or any other cryptocurrency that you may possess already. Platforms usually ask for this wallet address at the time of registration for the airdrop.

So once the due date for the airdrop arrives, the company will transfer the promised amount to your wallet address, that is, if you are among the winners of the lot. Note that different platforms may require you to have a wallet based on the blockchain that they employ for their service. For instance, MyEtherWallet is used for tokens built on the Ethereum blockchain, while StellarPort is a web wallet for XLM and Stellar-based tokens. Most of the blockchain projects are built on the Ethereum blockchain.

Hence, you will have to note the blockchain on which the platform is being built, in order to be a part of its airdrop. As you will need a wallet subsiding with the corresponding token that you intend to get for free.

Why are airdrops important?

One clear reason for airdrops is the promotion that a new platform or a service seeks among the crypto community. As the word of the participants starts going around the crypto ecosystem, the chances of people flocking to the service increase exponentially. This works much like the digital marketing of a regular business.

Stay aware of airdrop scams

Since there is a large interest in airdrops from those looking to make easy money, scammers have found it an ideal way to dupe people. Late last year, Metamask noted an airdrop scam wherein threat actors sent malicious tokens to random crypto wallet holders. With the account holders curious as to what the token is, they would often search for it online. The search would eventually land them on to the threat actor’s malicious website, where unsuspecting users are phished off their crucial online information.

Users are thus, advised to be aware of such scams and only indulge in airdrops of genuine platforms which may already be listed on authentic websites. Another rule for detecting such scams is if the users are asked to send some cryptocurrencies in exchange for enrollment in the airdrop. Or if the promised amount in the airdrop is way too high. In such cases, it is best to stay away from potentially malicious activity or do thorough research into what the project is all about.

Examples of cryptocurrency airdrop

The crypto industry has recently seen a number of crypto airdrops that surprised users.

The OpenDao SOS token airdrop has rewarded all creators, collectors, and enthusiasts of the non-fungible token (NFT) who have previously transacted on the OpenSea marketplace NFT. The recipient does not have to complete any tasks other than manually validating the token from the website. The airdrop helped OpenDao grow its Twitter followers to over 60,000, and over 120,000 addresses have claimed the token.

A similar initiative comes from Gas DAO, which issued GAS tokens on the Ethereum blockchain. Anyone who has ever paid $1,559 or more in gas fees on Ethereum is eligible for the airdrop, with tokens claimable through the website. More than 57,000 addresses have requested the airdrop. The GAS token provides voting rights in the Gas DAO, which aims to be the voice of the active users of the Ethereum network.

How can you become eligible for a crypto airdrop?

As a crypto airdrop is primarily designed for promotional and marketing efforts, it can be tricky to ensure you are eligible for future events. Every airdrop has individual requirements to assess eligibility, although most of them are easy to find. An airdrop involving a blockchain snapshot is often communicated after the fact, making qualification difficult. However, there are other options to explore:

  • Find dedicated crypto airdrop websites (you will usually get a notification via email) – similar to signing up for promotions from a store you regularly buy from.
  • Check social media for the #airdrop hashtag and see if anything new has happened.
  • Be an active user of different cryptocurrency services, products, platforms and blockchains.
  • Explore cryptocurrency-related forums and news portals for mentions of a recent or upcoming airdrop.

The main requirement for receiving crypto airdrops is having a cryptocurrency wallet with a balance. One can’t receive or claim an airdrop without having a wallet address. Using an exchange address is convenient but not suitable for airdrops. Instead, users should look into the various cryptocurrency wallet solutions they can use to store their funds. MetaMask is one of the most popular wallets to use.