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You may have often seen that when a new store opens or a company comes into being, they tend to give discount coupons via email or when you visit them. This is a good strategy to increase awareness about their existence and build a customer base.
In the crypto world, a similar practice exists. It is called an airdrop. The following sections will give you a clear idea about the airdrop.
Let’s find out.
An airdrop is a process in which a newly launched crypto project distributes free tokens to the public. You must own a certain number of tokens on a particular blockchain to get one.
The main reason why airdrops exist is that it serves as an effective way to promote a new project. This helps cryptocurrency holders like you diversify their assets, earn an effective dividend (based on previous holdings), spread awareness of the airdropped token and ultimately participate in the activities on that blockchain.
For the crypto project, it helps them onboard people, to their project and ensures a fair distribution of their tokens from the first day. This marketing strategy became quite popular during the ICO boom of 2017. However, it is still very relevant today as many new crypto projects still use this technique.
If you are a crypto holder, you may receive an airdrop after a certain period. You need to have a specific number of tokens in a publicly discoverable wallet at a certain period. This interval is called snapshot time.
Before an airdrop event, the companies take a snapshot of the account balance of each token holder at a specific point in time. They distribute cryptocurrency to certain token holders for free or in exchange for small services.
They can take place in the following manners:
A company called Gas DAO, which issues GAS tokens on the Ethereum blockchain, once conducted an airdrop. Any user who had paid $1,559 or more on Ethereum as gas fees were eligible for it. More than 57,000 addresses claimed the rewards from Gas DAO’s website.
In September 2020, Uniswap airdropped 400 UNI to every user who had interacted with its protocol before a certain date.
Bitcoin hard forked in 2017. Bitcoin users who held BTC got an equal amount of Bitcoin Cash (BCH) in their accounts.
Apart from having the requisite number of tokens in your account and waiting for a new blockchain project to launch, there are other methods to get airdrops. You can follow the steps given below to increase your eligibility for getting airdrops:
If you are the owner of a company launching a crypto project, conducting an airdrop can be a brilliant idea. It is a brilliant marketing technique that will make your organisation stand out. Furthermore, it will encourage the token recipients to trade your token and thus bring it into circulation.
The ultimate goal of a cryptocurrency is to be usable in all walks of life. Airdropping new cryptos to eligible users is a very encouraging step.
To get the full benefit of airdrops, there are certain things to keep in mind. They are:
If you are new to crypto investing, airdrops can be a gateway to exploring and interacting with this new world. However, before you dive in, conduct thorough research from credible resources. Doing a background search on an organisation offering airdrops is always a good idea to keep yourself safe from fraud.