Most people know the Airdrops from Apple. A smart functionality to wirelessly send documents, photos, videos, websites and map locations to and from a Mac and iPhone. But do you know what an airdrop is in terms of Crypto?
There are several ways to earn Cryptocurrency with Airdrops. However, not all methods are safe and legal. This post will dive into what Crypto Airdrops exactly are and how you could benefit from them.
What are Airdrops?
An Airdrop is a marketing campaign to bring a coin to the general public’s attention. In other words: a cryptocurrency, tokens, or NFTs are distributed for free (partly). This is an entirely new form of marketing. Airdrops are generally used to add additional value or draw attention to a brand or experience.
Airdrops are most commonly implemented as a promotional strategy to draw attention to an NFT project or other blockchain-based community such as a DAO or a newly created cryptocurrency.
Keep in mind that there are numerous types of airdrops for web3. Let’s go over the different kinds of airdrops commonly seen in the web3 space today.
More and more companies are discovering the success of cryptocurrency and want to participate. This keeps new cryptocurrencies coming up. By giving away a small portion of the coins, the underlying company hopes to generate enough attention to attract enough interested parties and potential investors to participate in the token sale (paid tokens).
1. Standard Airdrop
A standard airdrop is when a certain amount of cryptocurrency is sent to you in return for completing a simple task such as sharing a social media post, joining a whitelist, or providing your e-mail address to sign up for a newsletter or other e-mail services.
Standard airdrops do not require you to spend anything to receive the Airdrop; it is simply a task that you complete, and in return, you’re rewarded with the Airdrop. The cryptocurrency is usually a newer and unknown currency and may not be as valuable as some well-known cryptocurrencies like Bitcoin and Ethereum.
Think of a standard airdrop similarly to a real-life coupon. For example, say a new restaurant opens up in your town, and for the first week, they offer free appetizers if you choose to try out the restaurant. The restaurant is providing their customers with added value in the form of a free appetizer, while at the same time, they’re drawing in more attention and customers. It’s a win-win!
2. Exclusive Airdrop
Exclusive airdrops are distributed to loyal holders or users of a cryptocurrency or blockchain-based community. An exclusive airdrop is essentially a reward for being a loyal user and is generally dispersed with no strings attached other than being loyal.
I compare exclusive airdrops to being a member at a grocery store and receiving gas rewards for shopping at the store. You are rewarded for your continued support, and the grocery store gains a loyal customer and provides additional value through the gas rewards.
3. NFT Airdrop
An NFT airdrop can be initiated for several reasons. You may receive an NFT airdrop for holding a certain NFT in your wallet, promoting a brand in some way, participating in a giveaway, or even as a gift which is more a marketing strategy rather than a gift.
Just to be fair, NFT airdrops can be extremely valuable. An excellent example of a valuable NFT airdrop is the Bored Ape Mutant Serum. Holders of Bored Ape Yacht Club NFTs were airdropped variations of what’s known as the Mutant Serum NFT.
Although these Mutant Serums were airdropped for free to holders, it didn’t take long for them to begin selling for over 3 ETH (thousands of dollars) on secondary NFT marketplaces. In fact, on January 2, 2022, a Mega Mutant Serum sold for 1,542.069 ETH ($5,907,542.97).
That being said, not all NFT airdrops are valuable. Some may be completely worthless, and some may even be scams. If you ever receive a random NFT in your wallet without your knowledge from an unknown source, you should be extremely cautious in how you handle the asset and try to avoid selling it or trading it in any way.
4. Hardfork Airdrop
A hardfork airdrop occurs when a permanent split or new version of a blockchain is released, hence creating the need for a new token to go with it.
Generally, the old version of the previous blockchain will still exist along with your old tokens, but the new tokens will also be airdropped to you in an equal amount to what you currently hold in the old token.
What can I do with an Airdrop?
The primary purpose of participating in an Airdrop is to sell your received Crypto for a profit on the crypto market. For this to work, however, the token must be “listed” at an exchange where new speculators can buy this token from you. You need to have an account with an exchange where the relevant coin of the Airdrop is listed. These can be all kinds of exchanges. Registering with an exchange is often a simple task.
If you’re already regularly participating in Airdrops, you know how difficult it is to manually keep track of when your token has been listed on an exchange. Fortunately, there are all kinds of tools that can do the job for you.
What are the benefits of an Airdrop?
The value can vary greatly, but it is often between $ 1 and $ 20. It is definitely worth it for 5 minutes of work! One of the most successful Airdrops was the dYdX protocol (dYdX).
People who used the dYdX exchange for trading received 1500 dYdX tokens. If you sold these in October 2021, you would have just made more than $ 39,000. However, the knife cuts both ways. It also regularly happens that your Airdrop is ultimately worth nothing if you have not sold on time. An Airdrop is often only available for a few days/weeks.
Why Do Airdrops Exist in Cryptocurrency?
Most crypto and blockchain-based projects release a token because the economics make sense: investors and founders need to get paid. As to whether they will airdrop that token is a different story, but understanding why these token distributions occur is important to understand which protocols are likely to airdrop:
- Decentralize Governance: Crypto protocols that want to decentralize are likely to distribute tokens via airdrops as it’s a democratic and egalitarian way to reward early adopters.
- Bootstrap Liquidity: Providing incentives to liquidity farmers and teasing airdrops attracts money, liquidity, and early adopters to a platform.
- Build Hype: The $SOS token was a huge news story earlier last month and even reached mainstream media outlets. Token price exploded.
- Build Community: When someone gets a free token, they suddenly have skin in the game around a specific project. This is why we often see NFTs airdrop to existing NFT owners.
A note: tokens are not distributed evenly across all users. Different protocols encourage different behaviours on their platform and prevent gaming the system; thus, you must be strategic when becoming eligible for an airdrop.
What do I need to participate in?
So, by participating in an Airdrop, you receive free tokens/coins. A certain wallet is required to receive those coins. Examples are MetaMask, Phantom Wallet. Which wallet is needed is stated with the relevant Airdrop.
- Telegram; this is a must-have to participate in most Airdrops, as much of the communication is done via telegram channels.
- A wallet; for storing your tokens.
- (Optional) Twitter account and/or Facebook; Sometimes, projects that organize an Airdrop ask for a like or share promotion; in this way, you provide them with free marketing and receive some tokens in return.
Data that can be requested with an Airdrop are often:
- An e-mail address.
- A wallet address.
- A Telegram group to follow and remain there until after the coin/token has been issued.
Note that most tokens will be sent to your wallet when the Initial Coin Offering “first token issue” (ICO&IDO) has ended.
Websites with Airdrop alerts
As mentioned above, the announcements of airdrops mostly take place on various crypto channels such as Twitter and Telegram. However, you can also follow airdrops via websites and apps. Below is an overview of several websites where you can go for airdrop reminders and alerts:
What should I do if I have not received my crypto Airdrop?
While things are going well in most cases, people sometimes have not received their Airdrop. Often the conditions have not been fully met (for example, forgetting a step in the registration process). However, it is also possible that something went wrong with distributing tokens/coins. I would therefore advise you to keep any confirmations and evidence. In the unlikely event that you have not received anything after the distribution of the Airdrop, we advise you to contact the customer service of the relevant Airdrop. In most cases, you can just go to their Telegram channel for that.
Are airdrops safe?
Airdrops are generally considered a safe and effective way to market your brand and build community. However, that’s not to say that airdrops don’t come with some risks. There’s an extreme amount of scams in the web3 space, and any airdrop should be approached with caution and thoughtfulness every step of the way.
Many airdrop scams consist of an offering that may be hard to resist. These scams will ask you to enter your secret phrase or sign for the transaction using your web3 wallet to receive your Airdrop, which can lead to your wallet being compromised along with everything inside of it.
If you are ever offered an airdrop, you must do your own research and verify that the Airdrop is authentic and not a scam. Here are some common signs that an airdrop may be a scam:
- Requesting that you pay a small amount to receive your Airdrop
- Requesting any private information such as secret phrases and passwords
- Offering to help you via sharing your screen
- A new or lookalike NFT or crypto airdrop that’s unverified
- Links that direct you to a phishing site that makes you sign using your wallet
- If it’s too good to be true, then it’s likely a scam
If you find yourself in a position where you are questioning the legitimacy of an airdrop, then make sure to take your time to do the proper research and use resources such as Twitter to ask the community about the authenticity of the Airdrop.
If an airdrop is legit, then it’s highly likely that you’re not the only one who knows about it, so asking the community is one of the best things you can do.
Conclusion
Crypto airdrops can undoubtedly be interesting; history has taught us that. There have been many airdrops with which you could have made a lot of money. The most important thing you need to remember is that caution is advised. Some airdrops are solely focused on your personal information or even access to your crypto wallet.
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