The post Free Tokens for Everyone: A Comprehensive Guide to Crypto Airdrops appeared first on Coinpedia Fintech News
Have you ever received free tokens in your cryptocurrency wallet, without even buying them? If you have, then you have already experienced the magic of a crypto airdrop.
Airdrops are like surprise gifts in the cryptocurrency world, designed to attract new users, reward loyal ones, and create buzz around new projects.
For instance, in 2017, the cryptocurrency project OmiseGo airdropped free tokens to Ethereum holders, which ultimately helped to rise the profit of the project and increase its adoption.
The idea of receiving free money can sound too good to be true, and there are certain risks involved in participating in crypto airdrops.
However, with careful research and smart participation, airdrops can be a fantastic opportunity to grow your portfolio and gain exposure to new projects.
In this comprehensive article, we’ll take a closer look at crypto airdrops, including their history, how they work, and the different types of airdrops you might encounter.
We’ll also provide tips and best practices for safely participating in airdrops, and share real-life examples of successful airdrops that have benefited both projects and users.
Whether you’re a crypto enthusiast or a curious beginner, this article will equip you with the knowledge you need to share taking advantage of the existing world of crypto airdrops.
A Brief History of Crypto Airdrops: How Free Token Giveaways Have Evolved
Airdrops have evolved significantly since their inception, and have become an important part of the crypto environment.
If you want to know the essence of crypto airdrops, you must acquire a clear understanding of its evolution timeline.
The below-mentioned is the detailed timeline of the evolution of airdrops.
2014: The first crypto airdrop is initiated by the project, titled ‘Auroracoin’. It distributed free coins to all citizens of Iceland as a way to promote the adoption of a new cryptocurrency. However, it failed to become a national cryptocurrency. And, the project was thus a failure.
2017: The popularity of airdrops increased with the ICO boom, as new blockchain projects used airdrops as a way to attract potential investors and users.
Electroneum was one of the blockchain projects that successfully used airdrops during the boom. Its airdrop campaign, which offered users over 5000 coins for free, was extremely successful, with over 120,000 users downloading the app and creating the accounts in the first two weeks of the campaign.
2018: Airdrops started to become more sophisticated and targeted, with projects using them to reward early adopters, community members, and loyal users.
Steemit was one of the major projects that brilliantly used airdrops to build a strong and engaged community. It distributed a new cryptocurrency called ‘Steem’ to users based on their level of engagement on their platform.
2019: The rise of decentralized finance led to a new type of airdrop, where projects distributed tokens to users who provided liquidity to decentralised exchanges or participated in yield farming activities.
Uniswap was one of the popular decentralized exchanges that used airdrops to grow its liquidity and user base. It distributed a new cryptocurrency called ‘UNI’ to users who had previously used its platform or provided liquidity to the exchange.
2020: The pandemic led to a surge in charitable airdrops, with companies using them as a way to support affected communities.
GiveCrypto Coronavirus Relief Fund, aimed to help the affected poor, was one such popular charitable airdrop.
Airdrops also started to be used as a way to distribute tokens in a fair and transparent way, through mechanisms such as ‘snapshot’ airdrops that rewarded users based on their previous token holdings.
DeFi project 1INCH was one of the first ones to experiment with snapshot airdrops to distribute tokens fairly. As it used a snapshot mechanism, it took a snapshot of users’ cryptocurrency holdings at a specific time and distributed 1INCH tokens based on the amount of cryptocurrency held.
2021: The regulatory landscape around airdrops started to become clearer, with some jurisdictions requiring companies to register airdrops as securities offerings.
2022: The possibility of airdrops was expanded majorly, encouraging projects to reshape their potential as per their requirement.
BAYC’s Apecoin airdrop to its NFT art holders, Ethereum Layer 2 network Optimism’s airdrop of its OP token and Apto’s airdrop to its early adopters were the major airdrops witnessed.
2023: Now, airdrops are an unignorable element of the crypto environment, which has witnessed massive growth in the recent past.
Arbitrum airdrop, with over 42 million ARB claimed in the first hour, is the most sensational airdrop of the year.
You may have got a basic idea about the evolution of crypto airdrops.
What you have successfully explored in this section is the root of what is going to be discussed in the coming sections.
Now, be prepared to explore the working of crypto airdrops. It would be as interesting as the history. Let’s dive in.
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How Do Crypto Airdrops Works? A Step-By-Step Guide to the Airdrop Process
Airdrops are generally used as a marketing tool. A project usually uses the best marketing strategy that suits its requirement. For that reason, not every project needs to use the same crypto airdrop type.
Naturally, it is not easy to explain the working of airdrops, as there are several types of airdrops and the working pattern of each is different.
For you to get a basic idea, it’s possible to do a general discussion.
Here’s a general step-by-step guide to the airdrop process:
- Find a blockchain project that is running an airdrop and meets your interest.
- Most airdrops have specific requirements that you need to meet in order to be eligible to receive free tokens. These requirements could include following the project on social media, sharing posts, joining Telegram groups, or filling out a survey.
- Once you have fulfilled the requirements, register for the airdrop by submitting your details.
- After registration, you’ll need to wait for the tokens to be distributed.
- Once the tokens are distributed, you’ll receive them in your wallet.
- After receiving it, you can choose whether you want to hold onto the token or trade them on crypto exchanges.
As already mentioned, each airdrop type has a unique working pattern.
Are you curious to learn about the different types of crypto airdrops? Be ready! The coming section can help you quench your curiosity.
Take a moment to relax. Let’s explore the fundamental topic of Blockchain, to make the break interesting. Click here!
The Different Types of Crypto Airdrops: From Snapshot to Bounty Airdrops
Your curiosity is appreciable.
Your understanding of crypto airdrops would expand once your curiosity to explore its various types is rightly attended.
As you already know, there are several types of crypto airdrops. Interestingly, each has its unique characteristics and purpose.
Let’s explore them one by one.
The below govern are the popular types of crypto airdrops.
They are the most common type of airdrop. They involve taking a snapshot of the blockchain at a particular block height and distributing tokens to all addresses holding a certain cryptocurrency at the time
For example, a project might take a snapshot of the Ethereum blockchain and distribute its tokens to all Ethereum addresses holding a certain amount of ETH.
They are similar to snapshot airdrops, but instead of distributing tokens to all addresses holding a certain cryptocurrency, they only distribute tokens to addresses that hold a certain amount of the project’s tokens.
For example, a project might distribute tokens only to addresses holding a certain amount of its token.
They are a type of airdrop where participants are required to perform specific tasks or actions to receive tokens. These tasks could include anything from following the project’s social media accounts to creating content about the project.
They involve distributing small amounts of tokens to participants regularly, often daily or weekly. These airdrops are typically small in value and are designed to encourage users to interact with the project regularly.
They are a type of airdrop that is only available to a select group of users, such as early supporters of community members. These airdrops are often used as a way to reward loyal users and build a strong community around the project.
What determines the best airdrop type one project can choose is its purpose.
Snapshots and holders are the most common types of airdrops. But, if a project’s purpose is to generate interest and build a community, it should consider bounty, faucets or exclusive airdrops.
Now, you have a basic knowledge of this concept.
To practise the concept safely, you should acquire a deeper understanding beyond the basics.
Any discussion beyond the basics generally starts from the topic of ‘tips and best practices’.
It is where all those points you should be careful about while participating in a crypto airdrop campaign are discussed.
As we hit the pause button again, let’s explore the enormous topic of Ethereum, where innovation knows no bounds. Click here!
Tips and Best Practices for Participating in Crypto Airdrops Safely
This section would help you acquire true expertise in crypto airdrops.
It is not to make you run away from this practice but to enable you to make better decisions while engaging in crypto airdrop campaigns.
Here are some crucial tips and best practices:
Be cautious of scams: never participate in airdrops organised by untrustworthy projects and never share your private keys or personal information.
The myEtherWallet phishing scam, in which scammers created a fake website and promoted a fake airdrop, which required users to enter their private keys to receive the tokens, is the most sensational scam that occurred in the recent past.
Use a separate email address and wallet address: it can help you protect your personal information from getting shared.
Follow projects tightly: staying updated can help you evade all possible scams.
Do research: Before you select a campaign, do adequate research about your chosen project and its team.
Don’t see airdrops as an investment: it is advised to view airdrops as a bonus rather than a primary investment strategy.
Be patient: airdrop distributions can take time and may be delayed due to various factors.
Next time, when you participate in a crypto airdrop campaign, the aforesaid points would guide you to use the opportunity in a better way.
Anyway, It’s time to move to the final stage of this discussion.
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Real-Life Examples of Successful Crypto Airdrops: How Free Tokens Can Benefit Both Users and Projects
Those of you who are serious about exploring airdrops would benefit greatly from this section, as here you would get a lot of interesting insights to enhance the knowledge you have acquired so far.
Though this section is framed exclusively for crypto professionals, it can even excite crypto enthusiasts, as it contains real-life examples capable of providing deeper insights.
When we hear about the crypto airdrop real-life examples, what comes first in our mind is Stellar (XLM)
Stellar Development Foundation Airdrop
In 2017, the Stellar Development Foundation conducted an airdrop of 19 billion XLM tokens to Bitcoin holders. This highly successful airdrop resulted in over 2.5 million new accounts being created and increased the adoption and usage of the Steller network. This helped to increase the adoption and usage of the Steller network, as well as to raise awareness of the project among the wider crypto community.
Another equally popular airdrop is Uniswap.
In 2020, Uniswap conducted an airdrop of 400 UNI tokens to all users who had previously used the platform. This led to a surge in the popularity of this decentralised exchange, with the number of unique addresses using the platform increasing from around 100,000 to over 250,000 within a few days. This also influenced the value of UNI tokens positively.
Before we move to the conclusion part, don’t you feel that you need to spend a few valuable minutes analysing the top upcoming airdrops?
Time for a final break! Let’s also make this break eventful by immersing ourselves in the topic of Decentralised Exchanges. Click here!
A Few Top Upcoming Crypto Airdrops in 2023
The year 2023 is going to be a crucial year for crypto airdrops. Among the many reasons for this is the increasing popularity of airdrops as a beneficial marketing strategy.
Let’s see what are the top airdrops you should watch for.
At the top of the list, what we see is AiDoge.
AiDoge, a project which allows users to generate memes with the help of AI, to boost interest in its presale, is conducting a referral-based airdrop, offering supporters a share of 50 billion AI tokens.
Users can participate by buying AI tokens, sharing their unique referral code, and earning tokens based on how much funds their referrals raise.
AI tokens can be used for staking, earning APY, buying credits to generate memes, and voting on the platform’s development and the most popular memes.
Don’t you think that this is going to be a very exciting airdrop?
What makes the latest airdrops unique is their creativity factor.
One such highly creative airdrop is Love Hate Inu.
Love Hate Inu Airdrop
It is a new meme coin that aims to add value by offering various use cases, such as the Vote-to-Earn mechanism, where users can earn LHINU tokens for voting on hot-button topics related to current events and controversial figures.
It is currently running a ‘poll demo’ to showcase the platform’s setup, and those who enter this demo and cast a vote will be entered into a draw where one lucky winner will receive $10,000.
The project’s tokens can be brought through the presale, with the lowest entry prices reserved for early investors.
Another interesting airdrop is Tamadoge. This airdrop has already become a sensation for its numerous peculiarities.
Tamadige recently gave away $10,000 to one TAMA token holder.
To be eligible for future airdrops, users must hold $100+ of TAMA and complete nine tasks, mostly involving following Tamadoge on social media.
Tamadoge’s game allows players to feed and take care of digital pets and rewards them with TAMA tokens.
TAMA’s presale has sold out, and it will soon be listed on OKX.
Maybe you’re surprised to see how creative and innovative the latest airdrops are.
It’s time to conclude this discussion.
The evolution of crypto airdrops from simple token giveaways to sophisticated marketing strategies and innovative distribution models has shown their potential to incentivise user adoption, drive value for tokens and support charitable causes.
While caution is advised when participating in airdrops due to the prevalence of scams, adherence to best practices and tips can ensure safe and fruitful participation.
As the crypto industry continues to innovate and evolve, the role of airdrops is likely to further expand and offer new opportunities for projects and users alike.
To participate in a crypto airdrop, you typically need to follow the instructions provided by the project, which may involve joining their social media channels, completing certain tasks, or holding a specific cryptocurrency in a designated wallet.
While some crypto airdrops are legitimate, many scams seek to steal users’ private keys or personal information. To participate in airdrops safely, it is important to follow best practices such as only participating in airdrops from trusted sources and never sharing your private keys or personal information.
While some crypto airdrops may offer valuable tokens or coins that can appreciate, there is no guarantee of profitability. Airdrops should be seen as a potential opportunity to gain exposure to new projects or cryptocurrencies, rather than a guaranteed way to make money.
Yes, some airdrops do not require any prior cryptocurrency holdings.
By being an active member of the project’s community and following their social media accounts.
Not always, some airdropped tokens may have little to no value, while others can be highly valuable.
Yes, you can sell them on exchanges that list the token.
Airdrops can occur at any time, depending on the project’s goals and strategy.
Yes, you can participate in airdrops from anywhere in the world, as long as you meet the project’s eligibility requirements.