What Is An Airdrop Crypto? A Detailed Explanation

For crypto investors, maximizing returns is crucial.

Crypto airdrops offer a cost-effective way to boost your portfolio, as they provide free tokens.

However, not all airdrops are reliable, and despite their initial appeal, they can pose challenges.

Learn more about navigating the world of crypto airdrops and optimizing their benefits in this article!

Meaning of Airdrop in crypto
Crypto airdrops are a marketing strategy used by startups to give tokens to existing cryptocurrency traders for free or in exchange for minimal promotional work: Photo source (Coinbase)

What is a crypto airdrop?

A crypto airdrop allows you to earn free tokens from a project by completing tasks or meeting eligibility requirements.

Participation may require effort or involve transaction fees, but it’s also possible to join for free.

Crypto projects distribute a set amount of tokens to eligible participants who complete specified tasks, and claiming the tokens usually involves signing up or taking other actions.

Examples of crypto airdrops

Numerous crypto airdrops, spanning years, have occurred, including notable ones like Auroracoin’s 2014 event, where 50% of tokens went to Icelandic citizens.

Stellar Lumens (XLM) and Bitcoin Cash (BCH) followed with airdrops in 2016 and 2017, distributing coins to Bitcoin owners.

UniSwap’s 2020 airdrop gave 400 UNI tokens to over 250,000 users, proving lucrative for those who sold at the right time.

Different types of crypto airdrops

There are severalĀ different types of airdrops, all of which have unique characteristics. Crypto projects often see airdrops as a marketing tool where they try to grow as a project through the airdrop. For example, projects may be looking for more brand awareness and new users or they may want to reward their first users.

The motive of a crypto project is of course related to the type of airdrop.

There are a few types of crypto airdrops that are common, namely:

Airdrop in crypto
Source (Coinbase)
Standard airdrop

In a standard airdrop, you get free tokens without specific tasks.

Just create an account, provide your wallet address, and act fast as there’s a limited token supply.

Crypto airdrops are popular for easy and free participation.

Distribution may involve a draw, offering a chance to win, but winning isn’t guaranteed.

Bounty airdrop

With bounty airdrops, you can receive rewards for completing tasks.

These tasks take a fair amount of work, so the price you pay for free cryptocurrency tokens consists of energy and effort.

Often the tasks are not difficult but are valuable for a crypto project.

This is why new projects are increasingly choosing this method of token airdrops.

Holder airdrop

In a holder airdrop, owning a specific amount of one cryptocurrency earns you tokens of another.

The airdrop amount is based on a snapshot of your wallet, usually taken on a fixed date or within a certain period.

Your token quantity determines the cryptocurrency you receive.

How can you find upcoming crypto airdrops?

Find upcoming crypto airdrops through search engines like Google or specialized websites that list current and upcoming offerings.

Some platforms may not pre-list questionable airdrops to protect their reputation, and it’s wise to research and scrutinize airdrops independently.

Additionally, using swap platforms on low-fee blockchains can make you eligible for airdrops from crypto platforms you’ve previously used.

How do NFT airdrops work?

Airdrops aren’t limited to cryptocurrencies; nonfungible tokens (NFTs) also have airdrops for promotional purposes.

Qualifying for NFT airdrops may involve tasks or lotteries, and ownership of a specific NFT from a collection could be a requirement.

For instance, Bored Ape Yacht Club (BAYC) NFT owners received ApeCoin tokens in an airdrop.

Be cautious of NFT airdrop phishing and participate only in reliable airdrops, avoiding sharing personal data.

Are crypto airdrops safe?

Be cautious with crypto airdrops; scammers can exploit them, posing risks to enthusiasts’ cryptocurrencies and private keys.

Stay vigilant, especially if promised amounts seem too good to be true.

Never connect your crypto wallet to untrustworthy sources or share private keys.

Some scammers deposit fake tokens in fraudulent airdrops, making them unsaleable.

To avoid scams, research the project team and gather opinions from others.

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