What is crypto airdrops? To promote their project and token crypto startups use the term crypto airdrop as a marketing strategy. This involves distributing their own cryptocurrency to potential or existing users.
Users may need to participate in simple promotional activities such as following the project on social media and sharing their posts. Airdrops come in many forms and each project is different, however, most airdrops have the same goal to increase awareness and overall interest in the project. Some airdrops are directly into user wallets while others require manual claims. Anyone with a cryptocurrency wallet is eligible to claim or receive an airdrop, but there is always a risk from scammers. Numerous fraudulent airdrops can be used to transfer the tokens and steal money from your wallet. Verify the project’s validity prior to claiming an airdrop. Be especially cautious if the airdrop requires that you connect your wallet to the website.
In this article, we’ll discuss What is crypto airdrops and how they work. what scams to watch out for and I’ll share my thoughts on it. It’s becoming increasingly tricky for crypto traders and investors to keep up with all the new coins. Some cryptocurrency projects use airdrops to stand out and draw more attention to themselves. Although everyone loves free crypto these projects are not always legitimate.
What is a crypto Airdrop?
What is crypto airdrops? The distribution of digital assets from one cryptocurrency project to numerous wallets is known as an airdrop. Coins or tokens are given out to prospective or existing users in order to raise awareness of the project. Even though these tokens are free, some airdrops may demand that users complete certain requirements before they can claim them. The popularity of crypto airdrops grew during the cryptocurrency boom. These were key marketing strategies for many crypto projects in 2017 and are still being used today.
What is the process of crypto Airdrops?
What is crypto airdrops and their process? So there are many types of crypto airdrops. They usually consist of a small amount distributed to multiple wallets usually on Ethereum and Binance smart chains. NFTs are sometimes given out by projects although they’re less common. While some projects will distribute the money without you having to pay anything others will require that you perform specific tasks before you can claim. You may be asked to follow some social media accounts, subscribe to a newsletter, or keep a minimum amount in your wallet, you’re not guaranteed to receive the airdrop tokens.
Sometimes airdrops will only be given to wallets that acted on the platform before a specific date. One inch and Uni-swap were some popular companies that utilized this method to help early adopters. These were not like other common air drops and could be now worth thousands of dollars.
Why are crypto projects performing Airdrops?
What is crypto airdrops why do airdrops happen? Many blockchain projects offer free tokens to increase adoption and grow their networks. Higher token holders are frequently regarded as a positive sign. The project becomes more decentralized as a result, which increases ownership. Additionally, recipients are encouraged to advertise and use crypto airdrops. Before the project is listed on cryptocurrency exchanges, this aids in growing its user base. Airdrops can also create a false impression that there is growth. It’s essential to take into account other factors when evaluating adoption. If hundreds of thousands of people have a token but are not using it the project may be a fraud or have failed to attract the community.
Are crypto airdrops and ICOs the same?
What is crypto airdrops and ICOs? ICOs and crypto airdrops are two different concepts. An ICO is a crowdfunding method that requires participants to invest. Initial coin offerings are token cells that the project team holds to raise funds from investors. Icos became famous in 2014 when they were first introduced to the public, Ethereum was the first to use them. The crypto space saw a booming ICO market in 2017 with hundreds of new projects adopting this same method.
Related: ICO: Initial Coin Offerings Explained
Types of Airdrops
There are many ways to conduct cryptocurrency airdrops as we’ve seen, examples include bounty exclusive and holder airdrops.
Bounty Airdrop
To claim a bounty airdrop users must complete specific tasks. Some of these include tweeting about the project or joining the Telegram group. You’ll likely need to complete a form with your wallet address and proof of completion to claim a bounty.
Exclusive Airdrop
An exclusive airdrop of cryptocurrency is only available to certain wallets. These recipients must have a history with the project, such as being active in the community or supporters early on. In September 2020 the decentralized exchange known as uni swap made any wallet that interacted with their protocol before a specific day eligible for 400 unis.
Holder Airdrops
Holder airdrops give away tokens to holders with a certain amount of digital currency. The project team typically takes what’s known as a snapshot. A snapshot is a record of the crypto holdings of users on a particular date and time. Recipients can get tokens for free if their wallet balance meets the minimum requirements. For example, stellar lumens or XLM airdropped 3 billion XLM to bitcoin owners in 2016. Only users of the bitcoin network were eligible for this airdrop.
How to claim Airdrops?
As previously mentioned, the procedure may vary from one project to the next. The most important thing to claim an airdrop is a cryptocurrency wallet. Metamask is an easy-to-use and popular crypto wallet. After that, you can see if any tokens have been deposited into your wallet. You must contact a website in order to claim the airdrop.
How to avoid being scammed by airdrops?
It can be challenging to determine if an airdrop is legitimate or fraudulent, always be careful. Be sure to do your own research and always be careful of connecting your wallet to a website before signing up for an airdrop. Scammers may airdrop tokens to multiple wallets, however, your wallet will be drained if you attempt to transfer the tokens to a cryptocurrency exchange or another wallet. Scammers may also announce fake airdrops that lead to phishing websites. They will try tricking you into linking your wallet to a website similar to the original. Once you sign a transaction and connect your wallet other tokens will be taken from your wallet. Fake Telegram and Twitter accounts are often used to fool you.
Airdrop scams may ask you to send cryptocurrency to an unknown address to receive your tokens. You’ll not be asked for your seed phrase or funds by legitimate airdrops. Airdrop emails and direct messages can be dangerous. Avoid being conned by scammers and make sure you check the official website as well as social media channels. Save the official links to double-check that they are hosting an airdrop event. You should research more about the project if you don’t have much information. It’s better to ignore the airdrop if you don’t have much information or are unsure. You can also set up an additional wallet and email address to receive airdrops. This will ensure that your funds are protected from any airdrop-related threats, but most importantly never share your private keys.
Related: Future of Crypto currency
Conclusion
What is crypto airdrops? Crypto airdrops are a way for crypto projects to stand out in the crypto world and gain attention. This can be a great way for crypto enthusiasts and investors to increase their portfolios by investing in up-and-coming tokens. However, there are more scam air drops out there than legit ones so do your research before signing up.
I hope you got value from this article and have a better understanding of what crypto airdrops are, the different types of airdrops, and of course know what scams to be on the lookout for. Do you think crypto airdrops are a good thing or a bad thing leave a comment below.
