What is a crypto-airdrop and how does it work?
For most crypto investors, there is nothing more important than making money on the investment. Thanks to volatility, this can be done quickly, or it can be a hugely difficult task. Therefore, crypto airdrops are an affordable way to provide extra returns on your portfolio. After all, airdrop tokens are free and never hurt, right?
Almost daily there are new crypto airdrops, with some easier to obtain than others. Not all airdrops are equally reliable. Crypto airdrops always seem very lucrative at first, but they can also cause problems. To be sure you can earn on crypto-airdrops, but also look through any pitfalls, you can read all about crypto-airdrops and how they work in this article!
What is a crypto-airdrop?
A crypto-airdrop is a method where you can earn free crypto from a crypto project. There are several ways to receive these tokens. Many times an airdrop is associated with free cryptocurrencies, but this is not necessarily true. You may have to put in the time and effort, or you may have to deal with transaction fees. However, it is also possible to participate in an airdrop for free!
Related: What is cryptocurrency? A beginner’s guide to digital currency
You’m probably wondering; how do crypto airdrops work? Crypto projects have a certain amount of available tokens that they give to people who meet the qualification requirements. By completing puzzles, you can qualify for these tokens. There are several ways to participate in crypto airdrops. Often you have to register for an airdrop or perform other actions. After completing puzzles or winning tokens, you can claim them, otherwise they will be put in your wallet.
Examples of crypto airdrops
There have been hundreds of airdrops in the past, including airdrops from leading crypto projects. There are therefore a large number of examples of crypto-airdrops. Airdrops have been around for many years in the crypto world. The first airdrop ever took place back in 2014. At that time, a crypto project even distributed 50% of all tokens during an airdrop.
The crypto project, called Auroracoin, has its cryptocurrency token, known as AUR. The project had plans to make AUR Iceland’s national cryptocurrency. Therefore, the entire AUR airdrop went to Icelandic citizens, who could receive a total of 31.8 AUR per individual.
Many airdrops also followed in the years after the Auroracoin airdrop, including those from slightly more well-known cryptocurrencies. For example, in 2016 and 2017, respectively, Stellar Lumens (XLM) and Bitcoin Cash (BCH) organized cryptocurrency airdrops, and distributed their airdrop coins to Bitcoin owners. Bitcoin Cash gave away one Bitcoin Cash token per Bitcoin, which was worth thousands of dollars at its highest.
Another well-known crypto-airdrop is UniSwap’s airdrop, where the control token UNI was issued to users of the decentralized exchange (DEX) in 2020. In total, over 250,000 accounts received 400 UNI per account, which amounts to thousands of dollars per person. ! A very lucrative airdrop if you can sell your UNI tokens at the right time.
Different types of crypto-airdrops
There are several different types of airdrops, all of which have unique properties. Crypto projects often see airdrops as a marketing tool where they try to grow as a project through airdrop. For example, projects may be looking for more brand awareness and new users, or they may want to reward their first users.
The motive for a crypto project is of course related to the type of airdrop. There are a few types of crypto airdrops that are common, namely:
Standard airdrop
In a standard airdrop, tokens are distributed for free and you do not need to perform any special actions. All you have to do is create an account somewhere and then enter your wallet address. There may be only a certain amount of tokens available for airdrop, so you need to get there early.
These crypto airdrops are hugely popular because you can easily participate and it is free crypto because of this. In order to distribute the pieces fairly, the distribution can take place via a draw. In this case, you have a chance to win free crypto, but you are not guaranteed to win airdrop.
Bounty airdrop
With bounty airdrops, you can receive rewards for completing quests. These tasks require a lot of work, so the price you pay for free cryptocurrency tokens consists of energy and effort. Often the tasks are not difficult, but are valuable for a crypto project. This is the reason why new projects are increasingly choosing this method with token airdrops. Some examples of the activities are:
Holder airdrop
With an airdrop holder, you can receive cryptocurrency tokens if you have a certain number of tokens of another cryptocurrency. The amount of airdrop is determined based on a snapshot. At some point, a snapshot of your crypto wallet will be created. This moment is often a fixed date, but it can also be for a certain period of time. Based on the amount of tokens in your wallet, you can expect to receive a certain amount of cryptocurrencies.
How can you find upcoming crypto-airdrops?
You can find upcoming crypto airdrops in several ways. Of course, you can consult search engines like Google, and several websites have mapped out current airdrop deals. Often you can not only find airdrops in progress, but also upcoming airdrops.
Some websites do not list questionable airdrops in advance because they do not want to risk their reputation. Some platforms indicate the extent to which they trust the aircraft drop in question. No matter what an airdrop website thinks, it is still wise to do research and pay close attention to an airdrop.
In addition, there are often crypto platforms that launch airdrops for people who have used the platform before. These people are then qualified, without knowing it in advance. To qualify for possible airdrops, you can start using switching platforms. When you use exchange platforms built on a blockchain with low transaction fees, you can qualify for an airdrop very cheaply.
How do NFT airdrops work?
Most airdrops are about cryptocurrencies, but there are also airdrops where you can get nonfungible tokens (NFT). Just like crypto airdrops, NFT airdrops can be organized for advertising purposes. If you want to qualify for an NFT airdrop, there are several ways to achieve this.
Related: How to Save NFT Resources – A Beginner’s Guide
Sometimes you have to perform certain tasks, just like with crypto-airdrops, but the token issue can also be done through a lottery. In addition, you may also need to own another non-functional token from a specific NFT collection to qualify for airdrop. For example, owners of a Bored Ape Yacht Club (BAYC) received NFT ApeCoin tokens as airdrops. NFT airdrops can also involve risk, since airdrop phishing also occurs with NFTs. Therefore, always make sure that you only participate in reliable airdrops and never share your data.
Are crypto airdrops safe?
Crypto airdrops often seem harmless and safe, but this is not always the case. Scammers have also found ways to trick people into dropping air. They have found ways to harm crypto enthusiasts by removing cryptocurrencies or private keys.
Be vigilant and be careful with air drops, especially when promised high amounts that are too good to be true. It is important to remember that it is never wise to link your crypto wallet to an unreliable party or give away your private keys.
There have even been fraudulent airdrop actions where fraudsters have put in cryptocurrencies. These tokens turned out to be fake and were not salable. To make sure you do not fall victim to fraud, it can be helpful to research the team behind the crypto project and find out what others think.
