Imagine this. You are walking through a grocery store and a woman approaches you with free samples of a newly available chocolate dip. You try a sample and then go on your way. But the taste lingers and soon you decide to buy yourself a whole bottle. The whole process gives you a taste of the product and introduces the potential benefits of owning it, motivating you to get more involved. This is what crypto airdrops are meant to do.
Crypto companies send small amounts of coins or tokens to crypto wallet holders to spread awareness of the currency and encourage them to buy it. Active users of a blockchain platform receive these coins either for free or in return for a small service. The end result is a win-win situation in which you receive free digital assets while the distributing company gets publicity. Sounds enticing? Here’s all you need to know about it.
Types of Airdrops
To receive airdrops, you need to be an active holder of a crypto wallet. But different kinds of airdrops look for different requirements. Some require you to be in possession of a minimum amount of crypto in your wallet while others only need you to sign up for a newsletter. Let’s take a look at the basic types of airdrops.
A simple strategy in which coins or tokens are transferred to crypto holders for free. In such cases, you would only need to provide your wallet address or sign up for an account with the platform.
A barter system of sorts, this strategy provides users with the digital asset in exchange for a promotional activity like sharing a post on social media or joining a Telegram group.
Such airdrops are meant to reward loyalty. They only distribute assets to those who follow and use specific websites or companies. These can often be airdrop aggregators or cryptocurrency exchanges like ZebPay. For example, in 2020, Uniswap airdropped its asset (UNI) to all wallets that had made at least one transaction on its platform before 1st September 2020.
Holder airdrops go to those who already own specific cryptocurrencies, generally prominent ones like Bitcoin and Ether. For example in 2017, Omise gave five percent of their currency to holders of Ethereum.
Where Can You Find Airdrops?
Since marketing and awareness is the main purpose of airdrops, finding them is not very difficult. Airdrops can be found on the crypto project’s website or on cryptocurrency forums. Some airdrops, particularly the bounty kind, will have information easily available on social media. There are also specific businesses that cater to crypto airdrops. Such third party companies act as listing services for airdrops as well as provide users with alerts on the latest news and events. Crypto exchanges like ZebPay also provide access to airdrops in a convenient way.
Why Airdrops Matter
Crypto airdrops are a marketing strategy. Why do cryptocurrencies need marketing? If you think about it, any currency gets its value from the network of people using it. The more people that trade in a particular currency, the higher its value. But what about newer currencies that nobody owns yet? In a market where the average trader has hundreds of options to choose from, newer currencies need to stand out. This is where the airdrops come in.
Going back to the chocolate dip analogy, the marketing of the product doesn’t end when you buy a bottle. Later on, you tell your friends and relatives about it who in turn might buy it and spread the news even more.
In this way, startup crypto projects can use airdrops to not only create awareness about their product but also build a community. With a proper network of people on the platform, the circulation of the currency increases and so does its value.
More importantly, choosing the right airdrops can lead to a booming reward. When Uniswap conducted its airdrop, the price of its token was between $2-$4. However, a year later the same unit was priced at $25!
A Word of Caution
As in most communities, there are always those who try to take advantage of others. Remember that airdrops never require you to send funds. Stay away from anyone asking for payment on the airdrops. Scammers also sometimes send tiny amounts of crypto to wallets and use them to get your identity information. This can later be used to target you via phishing, extortion or hacking attempts. So if you come across an unsolicited deposit of coins in your wallet, take a minute to verify it. It’s crucial to investigate any deal before getting more involved.
Some experts even suggest a separate wallet solely for airdrops. With a few such safety measures and thorough research, there’s no reason you can’t add airdrops to your portfolio!