Crypto airdrops are a method of marketing commonly used by blockchain-based firms to fund their initial cryptocurrency development. The point of an ICO is to get the word out about the cryptocurrency and increase trading volume before it even hits an exchange (ICO).

Companies typically announce airdrops via websites, social media, and bitcoin discussion groups. Based on the blockchain network or the currencies held in current wallets, Vitaliy Dubinin believes coins or tokens are only distributed to those wallets.

The recipient may be required to have a specific number of cryptocurrencies in their wallet at the time of the giveaway. On the other hand, they may have to take some action, such as talking about the currency on a social media platform, reaching out to a specific person involved in the blockchain project, or publishing a blog post.

 

What is an Airdrop of Cryptocurrency?

Distributing free cryptocurrency or tokens to users’ wallets is an “airdrop.” Free or in exchange for a little service, such as retweeting a message provided by the company creating the currency, the new virtual money is distributed in small amounts to the wallets of active blockchain community members. According to Vitaliy Dubinin, the point of an airdrop in the cryptocurrency world is to have people using and trading a brand-new token or coin.

Cryptocurrency Airdrop Categories

• Standard Drop by Air

If you want to take part in a typical crypto airdrop, all you have to do is show interest. Some airdrops may only require the participant’s email address or wallet address.

Typically, there is a cap on how many tokens each given user can receive in a standard airdrop, and the amount of tokens distributed is predetermined. This means there is a time limit on some of the most common types of airdrops. While these types of airdrops are often sought after due to their ease of use, a single user could create many wallets and quickly deplete the airdrop amount.

• Airdrop of Bounty

Task-based crypto airdrops, or “bounties,” reward users for completing specific activities. Raising project awareness usually entails making a social media post, tagging the company, or retweeting a tweet about the initiative. Anyone who successfully recruits new users signs up for the project’s newsletter, or joins the business’s Discord channel may be eligible for a referral bonus or finder’s fee.

Users are often rewarded in points proportional to the size of the bounty airdrop they receive in exchange for completing activities. Users may need to reach a certain point total before receiving their reward to be eligible for an airdrop. Suppose all of the above are worth 100 points each, and a user needs 300 points to qualify for an airdrop.

• Conferring an Airdrop to a Holder

Cryptocurrency airdrops are distributed automatically to token holders based on the number and types of tokens in circulation. All blockchain users have complete visibility into wallet balances and token dispersal thanks to the public nature of the blockchain and the distributed ledger on which it is recorded.

One potential drawback of airdropping tokens to holders is that some token holders might oppose the idea. On the other hand, Vitaliy Dubinin believes holder airdrops restrict benefits to the largest and most committed investors. Some holder airdrops may only distribute tokens to members who meet a specified threshold of token holdings; otherwise, the award may be prorated.

• Private Airdrop

An exclusive crypto airdrop is a more granular form of holder airdrop in which only a small group of persons receive the airdrop. The key difference is that they may be chosen not according to the number of tokens they own but rather according to other factors, such as the length of time they have worked on a project, the amount of money they have spent on the non-token activity, or the number of forum posts they have made. As a more centralized method of rewarding those closest to the project’s development, an exclusive airdrop may distribute tokens to wallets that have never held tokens before.

• Contest Entry through Airmail Drop

A raffle airdrop could be used in conjunction with any preceding airdrop kinds. Many projects advertise the number of airdrops they plan to conduct and encourage participants to earn raffle tickets to win one. Earning this ticket is possible through the use of tokens, the accumulation of points, or even just expressing an interest.

In the end, more people may want the airdrop than the company can fulfill. Thus, a raffle is held, and a predetermined number of wallets are selected randomly to receive the airdrop.

Vitaliy Dubinin recommends that you never give your private key to someone you don’t know and trust.

Methodology of Free Cryptocurrency Distribution via Airdrop

In the first step of a cryptocurrency airdrop, the project or firm decides that one is necessary. This could be done in reaction to market strategies resulting from a network hard fork or to reward current investors. The first thing to do is determine who can participate in the airdrop and how it will be executed.

Starting a public campaign is the next stage for widespread airdrops. A company may collect email and wallet addresses by broadening its contact base.

Snapshots, the recording of a moment that shows which users meet a set of requirements, could be used for other kinds of airdrops. The project may, for instance, take a snapshot at midnight on December 31st to reveal all addresses that possessed more than 1,000 tokens at that time. Since the outcomes of the airdrop are locked in at the time of the snapshot, the price of the currency or token tends to fluctuate around the time that the snapshot is taken.

Once an airdrop recipient list has been compiled, it is common practice to employ smart contracts to distribute the airdropped tokens. The corporation may utilize its Treasury wallet to carry out the airdrop, and it will frequently provide the transaction block to prove the fairness of the airdrop. The airdrop will be sent from the company’s wallet to the beneficiaries in this transaction.

Most of the time, Vitaliy Dubinin believes people who receive airdrops don’t even have to accept the cash or tokens; they get them. To check the token balance in your wallet, you should add the token or coin and its address.

Conclusion

Airdrops are a form of cryptocurrency marketing that helps firms and projects spread the word about their token or coin. Giving their security free to hundreds of wallets is a great strategy to improve its liquidity. Despite the appeal of what amounts to “free money,” consumers should be wary of scams using cryptocurrencies offered via airdrops.