Crypto Airdrop: What’s an Airdrop and Why Crypto Airdrops Are Issued

There are also instances when a crypto airdrop may be issued to users without needing to do anything, as we will highlight below. Staying updated with the latest airdrops can be a game-changer in the rapidly evolving world of cryptocurrencies. And while the thrill of seizing these opportunities is undeniable, it’s paramount to ensure you’re grabbing the genuine deals and not falling for impostors. Some may prefer to instead focus on rewarding miners or other contributors of a network instead of releasing free tokens to non-heavy contributors of a project. Once the list of airdrop recipients is selected, the airdrop is facilitated often through the use of smart contracts. The company may choose to use global messaging service provider their Treasury wallet to facilitate the airdrop, and the company often publicizes the transaction block to demonstrate the equitability of the airdrop.

• Airdrops don’t require any investment from participants, but an ICO is a crowdfunding method.
• This ERC-20 token is now in use as a transfer of value, and investment and a governance token for the Arbitrum ecosystem.
• Some projects also involve KYC measures to mitigate fraud issues arising from airdrops.
• While airdrops can offer a great way of getting your hands on free crypto, from fungible tokens to NFTs, it’s important to exercise caution before claiming them.
• Although some everyday NFT holders made hundreds of thousands of dollars, the airdrop seemed to favor insiders and founders of the Bored Ape ecosystem.

The more users on the platform that use that feature, the more desirable it will become. This rewards early adopters as they can sell the tokens they have accumulated for a profit. Of course, this doesn’t just work with NFTs, but any crypto token in general. In many cases, projects will airdrop tokens to their exclusive communities acting as an incentive for their members too. In this article, you’ll learn all about what crypto airdrops are, how they work, and how to claim them safely.

Make sure you meet all the requirements to be eligible for the airdrop. If there’s no official airdrop announcement or instructions, but you think there will be one, you may increase your chances by becoming an active platform user. If an airdrop is eventually announced, the project may prioritize rewarding those who have been actively involved from the beginning.

What is a Crypto Airdrop? A Comprehensive Guide.

Holder crypto airdrops occur automatically based on who is holding existing tokens and how many tokens they hold. Because wallets and blockchain information are part of a publicly distributed ledger, all users of blockchain have full transparency into the wallets and distribution of tokens. A holder airdrop rewards users who are ‘holding,’ or have accumulated, a certain amount of tokens at the time of the promotion. This is determined by a community-wide snapshot taken at a certain point in time of user wallets, which can occur on a specific date or during a set time span. A reward is gifted to those who have met or exceeded a threshold amount. After NFT-to-token swap platform Sudoswap launched its own governance token, users holding NFTs of its sister application Oxmon — OXMON tokens — received the first batch.

Are Crypto Airdrops Safe?

Legitimate crypto airdrops will never ask users to make any investment. Instead, it is a way a guide to trading and investing in cryptoassets to stand out among competitors that have pursued external funding before issuing their tokens. Historically, these giveaways have roots that trace back to the early stages of cryptocurrency development. As new tokens emerged, developers sought methods to increase adoption and awareness.

How to Get Crypto Airdrops?

It is also a way to increase the liquidity of their security by giving it away to thousands of different wallets. Though airdrops have value and may be considered free money, there are also significant risks if users are not aware of potential scams related to crypto airdrops. Although crypto airdrops are commonly employed to promote new projects, some existing projects use airdrops to reward longtime community members. The 2021 Ethereum Name Service airdrop, for example, awarded tokens to existing ENS domain holders based on a formula determined in part by how long their domains had existed. The key takeaway from holder & staking airdrops is that the amount of cryptocurrency airdropped to participants is predetermined based on a snapshot date of your wallet addresses.

You should be particularly careful when it requires you to connect your wallet to an airdrop website. Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. In essence, while the allure of free tokens is undeniably tantalizing, there’s often a strategic motive driving these token giveaways.

Then again, if you are going to invest your hard-earned money into crypto, these tools can greatly help to improve or even double the value of your initial investment, risk-free . In such cases, projects can opt to conduct airdrops in order to balance out a token’s distribution. Initially, airdrops usually benefit the issuing company more, but recipients of the free coins can occasionally be in for a treat later on. Consider using a hardware wallet such as Ledger or Trezor, especially when managing large amounts of of crypto.

Users may also be required to earn a certain amount of points before they qualify for their airdrop. For example, a user may be eligible for an airdrop after earning 300 points with each item mentioned above is worth 100 points each. To qualify for the free gift, a recipient may need to hold a minimum quantity of the crypto coins in their wallet.

They are often the ideal audience and are more likely to contribute to the project after learning about it via the airdrop. Another variant of the standard airdrop involves simply giving away what are altcoins everything you need to know tokens to holders of a specific cryptocurrency. These holders are usually identified by a ‘snapshot’ of the blockchain at a given time.

Recipients may become curious about the project and explore it further, or discuss the project on social media. This increased exposure can lead to a bigger pool of users, investors, and potential partnerships. Engaging with a project, be it through their social media channels or newsletters, can also make you eligible. And in some cases, the duration for which you’ve held certain tokens can earn you a special airdrop as a thank-you gesture. A cryptocurrency airdrop is a mass distribution of cryptocurrency to many digital wallets.

Examine the legitimacy of the airdrop by visiting the official project website, social media accounts, or forums. Look for verified badges, community engagement, and reliable sources confirming the airdrop. Not only do they introduce individuals to new tokens, but they also incentivize network participation, foster community growth, and pave the way for newer innovations. A legitimate crypto airdrop never seeks capital investment in the currency. On other hand, some crypto scams involve sending micro amounts of bitcoin or other cryptocurrencies to unsuspecting recipients in what is known as a dusting scam.