- Crypto airdrop is a marketing technique deployed during the launch of a crypto project.
- There are primarily three types – bounty, exclusive and holder.
- The crypto market is riddled with scamsters as well and it is necessary to be on high alert against ‘pump and dump’ schemes.
This is not your typical Apple Airdrop where you receive audios, images and video clips in a jiffy. Crypto airdrop is a marketing technique, mostly used to promote a particular crypto product or project. The word ‘airdrop’ is when small amounts of the crypto currency are sent to the wallets of users for free or in return for a small service– usually promotional.
A country’s native cryptocurrency is usually distributed for free to the users in a bid to promote the currency or get a buzz going on social media. If one goes and logs in the word ‘Airdrop’ on Twitter, there is a plethora of projects that pop up on the screen, each promoting their own agenda.
When did crypto airdrops become popular?
The first crypto airdrop has been documented to have occurred on March 25, 2014. AuroraCoin (AUR), which was intended to be the cryptocurrency for Iceland, was airdropped, with every citizen who submitted their national ID receiving 31.28 AUR.
Crypto airdrops became very popular during the time of the initial coin offering phase that began back in 2017. Airdrops were used to increase the circulation of the currency before their public listing. They were instrumental in providing legitimacy to the crypto projects. Airdrops ask for no personal investment from customers.
Types of airdrops
There are primarily three types of airdrops – bounty, exclusive and holder. While a bounty airdrop requires you to promote or complete certain tasks associated with the project, an exclusive airdrop is only sent to designated users. These customers need to be either an early supporter of the project or a member of an active community associated with it.
This was done by the recent adopter of Bitcoin, El Salvador – where citizens were sent $30 worth of BTC for every citizen who downloaded the government wallet.
Holder airdrops distribute free tokens to wallets which have a certain amount of digital currency in them. If the balance meets the minimum requirement of the project, they can claim the said tokens.
How do crypto airdrops work?
Airdrops are usually distributed on Ethereum and Binance Smart Chains. These require the users to either have a certain amount in their wallet or promote the company.
Even though the users go through all the steps, there is no guarantee that the users will have access to the tokens of the projects that are being promoted. Oftentimes, the project only gives access to users who have been with the project before a particular date. As is true with all marketing tactics, crypto airdrops have their pros and cons.
Two sides to crypto airdrops
The crypto market is riddled with scamsters as well and it is necessary to be on high alert against ‘pump and dump’ schemes. These projects have a lot of hot air in them and while airdrops never ask for crypto investments, some fraudulent projects steal your wallet when you claim or transfer free tokens. A special precaution needs to be taken when one connects their wallet to the airdrop website.
In October 2020, Binance chain underwent what is called a ‘dusting attack.’ After sending tiny amounts of bitcoins to multiple addresses, a link to a malicious website was left in the transaction memo, making unwary users click on the link to receive it. Wallets are susceptible to attack and airdrops are one means to an end.
It is necessary for users to make sure the project they are investing in has been thoroughly researched and talked about before. If the founders are well known and can be held accountable on social media, it helps immensely. While airdrops are efficient in marketing a crypto product and cultivate a sense of decentralized ownership, one needs to keep a watch for possible fraud.
