Crypto Airdrops Explained - A Step-by-Step Guide

What is airdrop? Why and how does it work? Where can we find new airdrops?

What is Airdrops?Crypto Airdrops Explained

 In the cryptocurrency market, the term airdrop is used to describe a free cryptocurrency distribution event where tokens are distributed to existing wallets.

Airdrop is a marketing strategy adopted by startups to promote their company. The purpose of airdrops is to spread awareness of Bitcoin and other cryptocurrencies among people.

It doesnhurt to get some free and authentic airdrops, and it can actually be profitable, but be careful to avoid some scams. Never share your password or private keys with others for any reason, and do some research before receiving airdrops from certain platforms to see if they are valid or not. 

Airdrop history

The first crypto airdrop in history happened in 2014. This airdrop belonged to the Auroracoin project, which was designed as the national currency of Iceland. Auroracoin has distributed its native token called AUR (AUR) throughout Iceland, allocating half of its total supply to the people of Iceland.

Residents of Iceland could receive 8/31 tokens only by registering. After some time, these initial owners of the Over token received the first ever airdrop.

Although Auroracoin was the first project in history to offer airdrops to its users, it wasn long before other projects also did their first airdrops. The Stellar Foundation was established with a pledge to distribute 19% of its token supply, or 19 billion Stellar Tokens (XLM), to Bitcoin holders, and finally made good on its promise in 2016.

Initially, the project experimentally distributed three billion Lumen tokens to Bitcoin holders through various exchanges, and then in 2019, Stellar distributed the remaining 16 billion Lumen tokens to Bitcoin users in proportion to the amount of Bitcoin they received through different exchanges had kept, presented.

As expected, giving away such huge sums of money for free received widespread attention from prominent media and news sources and became popular as the most attractive and practical and effective advertising method among cryptocurrency projects.

By now you are familiar with the concept of airdrop, but it is just like seeing the beautiful blue surface of the ocean. The more you look into it, the more surprises and opportunities you will encounter. To dive more and discover new species in this magnificent ocean, you should first get to know the types of airdrops.

Different types of airdrops

Airdrops can happen in several different ways.The term airdrop is often used for free tokens deposited into users wallets, but actually airdrop is not only for free distribution of digital currency and has many different purposes and functions.

Standard airdrop

In standard airdrops, users receive free tokens for registering on a site or news section.

Bounty Airdrops

Bunty Airdrops require users to do a simple task in exchange for free tokens. This simple task often involves tweeting about the project, posting about it on Instagram, sharing with friends and acquaintances, or joining a Telegram group.

Private airdrops

These types of airdrops are exclusively designated for certain people who have a history of collaboration or activity in a particular website, project or community. For example, the Uniswap platform in September 2020 allocated 2,500 UNI tokens to its loyal users, which at that time was equivalent to $1,200.

Airdrop hard fork

This airdrop is different from the rest. When a cryptocurrency forks from its parent blockchain, a new cryptocurrency is actually created and those who owned the previous tokens of this blockchain will receive the same amount of the new token.

The most famous example of this airdrop is the Bitcoin Cash hard fork that happened in 2017, and users who had Bitcoin tokens in their wallets received an equal amount of Bitcoin Cash tokens.

Airdrop of token holders

This type of airdrop is very similar to the hard fork airdrop because, like the hard fork, users who already had certain tokens will receive new tokens. For example, EOS and Ethereum platforms sometimes give their users some free tokens when they create a new project on one of the blockchains.

Why is there airdrop at all?

Cryptocurrency platforms may distribute airdrops for a variety of reasons, including:

Increasing awareness
Considering that there are more than 3,800 coins in the cryptocurrency industry and many more are under development and release, it is very difficult for some coins to get noticed in this crowded market. In this way, platforms use airdrops to market and attract investors.

Encouraging investors
Those who receive free airdrops of new cryptocurrencies will quickly become interested in them and attract more investor attention to these cryptocurrencies. As a result, attracting more fans will lead to an increase in the price of the coin.

Dealing with obstacles and sanctions
Due to the fact that Initial Coin Offering (ICO) is prohibited in some countries, Airdrops are an alternative and suitable way for people in these countries to access cryptocurrencies and buy and sell them.

Thanks to network users Some projects collect their desired capital through private investors. These projects distribute airdrops to these investors to thank them.

If you want more information about early sales events and how to participate in them, read this article:Understanding Token Sales: ICOs and IEOs in the Cryptocurrency Space

Fair distribution of tokens

One of the most important advantages and characteristics of cryptocurrencies is that they are decentralized and open-source, and by creating equal conditions for all participants, it eliminates any inequalities that may give unfair advantages to some. Airdrops are also a fair mechanism to facilitate the entry of users into a decentralized network.

A tool for marketing Platforms launching new products use a token distribution event to attract new customers.These platforms may require their users to participate in a new service in order to receive some free tokens.

Additionally, these companies can also give free tokens to their customers in exchange for product or service referrals.

As a reward for early investors Cryptocurrency platforms may sometimes reward their users who have been using platform tokens for a long time. Using their database, these platforms can identify those who participated in the initial launch of the network.

Airdrop distribution due to hard fork

Fork is a term used to apply fundamental changes to a cryptocurrency network and platform. Developers of these platforms may decide to change the code of their cryptocurrencies. After applying the changes, two copies of a single cryptocurrency appear in the digital currency market.

The final version of these tokens is usually distributed as an airdrop among users and token holders. Some of the most popular platforms, such as Bitcoin, Ethereum, and Litecoin, have used airdrops to minimize the effects of a fork on their network.
 

Why is airdrop important?

We mentioned that crypto airdrops are among the popular marketing techniques used by projects to stimulate user activity, decentralized token distribution, and help build a vibrant community.

Cryptocurrency projects distribute their tokens for free to raise awareness and determine the value of their token.
 an aggressive marketing style that previously faced limitations.

However, recently, airdropping has become a major step for launching a company. It is especially important for companies that want to launch their project by targeting network users of a particular platform.

Crypto Airdrops are important because despite the fierce competition in the crypto market, companies can attract new users and investors to their project by distributing them. for example; In this case,

the startup may target users of networks such as Binance Smart Chain, Ethereum, Polkadot or NEO.

However, AirDrop has many advantages for network users. Airdrops can be an opportunity to earn free money, especially if the value of the cryptocurrency in question increases over time.

Although startups get immediate results from their airdrops, for their users and holders, these airdrops will be beneficial in the long run as the tokens increase in value.

What is the use of airdrop?

Airdrops often give users free tokens for doing something very simple or even doing nothing at all, and in that sense, it can be said that they are very useful.

At the same time, when a new crypto project airdrops, it changes market trends and supply volumes, which may have a significant impact on prices. Especially in these cases, users who receive new tokens for free have a strong desire to sell new tokens quickly.

In this way, suddenly many cryptocurrencies are offered and lead to a decrease in price. In most cases, airdropped cryptocurrencies immediately experience a price drop.

A good example of this is the airdrop token on the AuroraCoin platform. We mentioned that this cryptocurrency made its first airdrop in history in 2014, and every citizen who registered received 31.8 Over tokens for free, which at that time was equivalent to $380.

At that time, Over Token was worth about $3, and immediately after the airdrop, its price dropped sharply, and currently, at the time of writing this article, the price of each Over Token is $20.00.

In addition, Auroracoin cryptocurrency can only be bought or sold on two small exchanges and has very little liquidity in the market, making it difficult for holders to sell.

This example shows that over time airdropped tokens may become worthless or lose their value significantly.
 

Where can we find new airdrops?

If you want to get the latest crypto airdrops, luckily there are many websites that you can visit and find the latest airdrops from. For example, the Airdrops website is one of these sources, and users can find the specifications and time of the latest airdrops from this website.

The Airdrop site is one of the most reliable and best platforms for reviewing new Airdrops.

This website provides users with news about the latest and most prominent airdrops, Telegram airdrops, Twitter airdrops, etc. Moreover, it brings users the latest and most profitable earning opportunities every day.

Some of the most prominent airdrops introduced by this site are Bitcoin Rhodium, Point Pay, SymbKon, Isher, Daps and BinanceJex.

This website has provided the details and specifications and roadmap of each airdrop and its platform, and you can choose the right and safe platform to receive the airdrop by reading these details.
If you don't know much about the road map and how to read and check it, be sure to read this article before taking any action:

What does the roadmap mean in the crypto world-How to read and use crypto roadmaps for better choices - 10 important tips

Conclusion

Airdrops play a significant role in the cryptocurrency market by promoting awareness and attracting new investors. By offering free tokens, projects can generate interest and encourage community engagement. However, it is crucial to stay vigilant against scams and only participate in legitimate airdrop events. As this market continues to grow, airdrops will remain a powerful tool for both startups and users. Keep an eye on trusted sources for new opportunities, and consider adding airdrops to your crypto strategy for potential gains.

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