The other day, I went to a launching of a new multi-million dollar beverage company with my uncle. As invitees of the occasion, we got a thousand plus cartons of newly made chocolates for free to market at a certain lucrative price tag in our retail store’s location. I couldn’t help but wonder how rich we were going to be after selling off these free chocolates.
The concept of cryptocurrency airdrop can be attributed to the free chocolates I got from this new company to sell and make money.
In this Article, Cryptocurrency Airdrop is duly explained and the procedures on how to go about getting these crypto tools are not far from reach.
Cryptocurrency Airdrop
An airdrop, in the cryptocurrency, is a digital token awareness in form of a marketing strategy that involves sending coins or tokens to wallet addresses to promote a newly developed cryptocurrency. Small amounts of the new virtual currency are sent to the wallets of active members of the blockchain community for free or in return for engagement in the building and development of a crypto target audience for the company issuing the currency.
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Promotional services, such as shilling of projects, Following an account on social media, liking and retweeting a post on social media (Twitter, discord, etc) sent by the company are among the marketing method employed by startups in the cryptocurrency space. There are also instances when a crypto airdrop may be issued to users without needing to do anything.
Cryptocurrency projects that are newly developed and intend on making their way to the crypto market world or more specifically crypto exchanges employ airdrops to raise awareness and increase ownership of the currency startup.
The main idea is to send newly minted tokens to hundreds or thousands of different wallet addresses with the hope recipients will be more inclined to engage with the corresponding project.
A crypto airdrop isn’t about making the recipient spend money but rather raising awareness for new projects and services. Any airdrop that requires one to spend money in other to acquire them is simply a scam airdrop. A legitimate crypto airdrop never seeks capital investment in the currency.
Types of Airdrops
Crypto projects that are looking for engagement in the services they provide employ different kinds of airdrop strategies, although their main motivation is to incentivize users.
The most common types of airdrops you’ll see are the following:
- General airdrop
- Holder airdrop
- Exclusive airdrop
- Bounty airdrop
General airdrop
In a general airdrop, a suitable amount of native coin or token is transferred into existing wallets that are eligible, to encourage more people to adopt the asset, often during their initial coin offering or presale.
All you need to do is sign up for an account with the new project, and provide your wallet address during the distribution event
Holder airdrop
Holder airdrops are airdrops that are distributed to people who have some amount of another cryptocurrency in their wallets. The crypto project takes a snapshot of crypto holdings on a specific date, then lets people claim an airdrop based on their ownership at that time.
Bounty airdrop is a type of marketing strategy that requires potential recipients to engage in some promotional activity before they can be eligible to receive the digital asset.
These activities could include:
- Sharing a post about the blockchain project on Twitter or other social media platforms
- Signing up for the project’s email newsletter
- Joining a forum ( Discord, medium, telegram) to discuss and participate in the project
It takes a bit of tasks like the ones mentioned above to be eligible for a bounty airdrop, although these tasks are not demanding.
Advantages and Disadvantages of Cryptocurrency Airdrops
As long as the concept of business is applied in cryptocurrency markets, Crypto airdrops, like every other business, have their advantages and disadvantages. Below are the advantages and disadvantages of crypto airdrops.
Advantages
- Crypto airdrops serve as a good strategy for crypto-related startups to promote their projects.
- Users who claim crypto airdrops get rewarded for the time and effort they have put in to support a crypto project.
- When there is an increase in value of the crypto airdrops during trading, it serves as a way of making passive income.
- Crypto airdrops enable a crypto project to garner enough engagement required to be listed on exchange platforms.
Disadvantages
- Crypto airdrops are susceptible to the “pump and dump” scheme – a process of hyping a token till the price increases and immediately selling off the tokens in large quantities, resulting in drastic depreciation of the token price.
- Some airdrops may require one to give out sensitive information or money from users,
- Users could fall victim to scam airdrops that require one to send a particular amount of crypto to a certain wallet address before being eligible to receive an airdrop. Once you come across such a method of the crypto airdrop, know that it’s a scam.
Key Take-home Points:
- An airdrop is a digital token awareness in form of a marketing strategy that involves sending coins or tokens to wallet addresses to promote a newly developed cryptocurrency.
- Crypto airdrops enable a crypto project to garner enough engagement required to be listed on exchange platforms.
- Any airdrop that requires one to spend money in other to acquire them is simply a scam airdrop.
NWANKWO CHIGOZIE
Nwankwo Chigozie is a content writer and cryptocurrency enthusiast. He loves researching about cryptocurrency and everything surrounding the cryptospace. Follow on all social platforms.