The Byte and Bit of Crypto Airdrops: How to Get Airdrop
Today we would love to cover about airdrop a term using a lot in cryptocurrency, what is Airdrop, the Uses and all-important stuff about it. How to get free crypto from crypto airdrop alert.
Airdrops have always been a way where some project distribute their tokens for free in order to increase the number of users or holders of the token. By doing an airdrop some projects increase the number of people that are aware of the project and mostly some project does it just to encourage or reward people for using their project, projects as Optimism, or Early bird users like ENS.
This post is a Twitter thread from Sir-D from twitter. The outline is as follows
Checkout list of verified crypto airdrop here
- Definition & History.
- Common Examples of Extremely Profitable Airdrops.
- Why Airdrops Are Used in DeFi, And Importance of Airdrops.
- The risks of Airdrops.
- How to find airdrop alphas (links and pages) as well as potential forthcoming airdrops.
Read: Blockchain and Crypto Words/Phrase and Their Meaning
What is Crypto Airdrop:
An airdrop according to the dictionary is: The act of delivering goods, equipment, or personnel by dropping them from an aircraft in flight.
In cryptocurrency, it is the distribution of free tokens to help bootstrap/start-up a new cryptocurrency.
An airdrop can also be said to be an unsolicited distribution of a cryptocurrency token or coin, usually for free, to numerous wallet addresses. They are often associated with the launch of a new cryptocurrency or a DeFi protocol, primarily as a way of gaining attention and new followers, resulting in a larger user base and a wider disbursement of coins. Airdrops have been a more important part of ICOs since crypto entrepreneurs have started doing private sales instead of public offerings to raise initial capital.
Airdrops are also often used by companies, brands and entrepreneurs to reward their current holders, investors and collectors, which may receive tokens, coins or assets for free, based on how much they invested or contributed to a certain project.
Airdrops aim to take advantage of the network effect by engaging existing holders of a particular blockchain-based currency, such as Bitcoin or Ethereum in their currency or project.
HISTORY OF AIRDROPS
Arising from the developments in blockchain over recent years, a crypto airdrop is said to be a form of distribution and marketing specific to the cryptocurrency industry. Moreover, there are several different types of crypto airdrops. Akin to receiving vouchers to spend- in a store, a crypto airdrop involves an application or platform sending free crypto assets to certain wallet address owners. Also, different crypto airdrop models may require users to carry out specific actions to receive their coins.
That said, an airdrop of assets to holders is always free. In turn, this often aids in promoting and adopting up-and-coming crypto projects.
The first crypto airdrop was an Icelandic project, Auroracoin, in 2014.
The project gave every Icelandic citizen, with a permanent resident ID, 31.8 AUR coins. However, due to poor planning, the market cap value of the project fell to zero within months. This left the assets worthless. Nevertheless, Aurora introduced an unconventional and novel type of guerilla marketing method to be used by countless other projects in the future. Accordingly, the first crypto airdrop website launched in 2017.
The rise in popularity of the crypto airdrop model mainly depends on its advantages for projects and asset holders. It is increasingly commonplace for new projects to airdrop targeted token holder communities with free assets to generate buzz ahead of an anticipated launch.
Moreover, platforms may choose to use the crypto airdrop model to reward a certain level of token holder loyalty.
Auroracoin (AUR) was the first crypto asset using the airdrop distribution model. As a cryptocurrency, the idea of AUR was to replace the use of traditional fiat Iceland. Although this particular project didn’t work out, it is mainly cryptocurrencies that are airdropped to users. Furthermore, cryptocurrencies can be of multi-utility value, offering governing rights or access to exclusive content on project platforms.
In addition, most cryptocurrencies are tradable and exchangeable for alternative cryptocurrencies or fiat currencies. In turn, users can sell their airdropped assets if they so choose.
Another more recent type of cryptographic asset used in the crypto airdrop models is non-fungible tokens (NFTs). NFTs represent unique pieces of data on the blockchain and, unlike fungible cryptocurrencies, are not interchangeable. As such, with surging popularity,
NFTs are becoming one of the hottest crypto trends. Especially with NFT projects offering NFT airdrops to users ahead of launch. Also, some NFT gaming platforms airdrop users NFT assets rewarding them for their loyalty and adoption of the project.
For Crypto Airdrop Alert vist Airdrop Alert
TYPES OF CRYPTO AIRDROP
A standard airdrop is often the model most people think of when they see the phrase “crypto airdrop.” As such, a standard crypto airdrop is available to anyone.
Users may receive free crypto assets native to a platform for carrying out small tasks. For example, this could be creating a new account or signing up for a newsletter.
While the standard airdrop model is theoretically available to anyone, certain platforms or projects may require KYC (know your customer) verification prior to receiving assets. This could involve users giving personal details ranging from an email address to uploading proof-Of residence. Different projects will outline their own specific parameters.
The bounty airdrop model is specifically for airdropping crypto assets to users actively seeking to promote or support a blockchain project. This extends to various activities, from finding any bugs in the code to sharing content on social platforms.
In addition, users could receive assets through the bounty crypto airdrop model for simply following the project on social media.
Although this is not a very common distribution model of platform tokens, aids in incentivizing the community to share in the marketing activities -
of a project. Plus, with the bounty airdrop model, users can often earn more tokens through referrals of friends and family.
This particular crypto airdrop model operates as the name suggests. With an exclusive airdrop, new project tokens are sent out to an exclusive number of participants. Often, this is the case for early adopters of a platform before the project releases a token.
With a community-centric approach, exclusive airdrops are popular for existing platforms aiming to generate hype around a token launch while simultaneously rewarding loyal users.
Furthermore, users of a project do not need to do anything more than simply interact with the -
interact with the platform and its protocols. The exclusive airdrop distribution model was used by some of the leading exchanges and aggregators, which we’ll discuss further in this piece.
“Hodl” is a common saying among the crypto community as an abbreviation of “hold(ing) on for dear life.” This is in reference to not selling a crypto asset, particularly in times of a bearish market. Accordingly, projects can use a holder airdrop method to distribute freshly minted platform tokens to long-term holders.
Often, projects will airdrop their cryptocurrency tokens to holders of other tokens using the same blockchain. Alternatively, as projects expand their operations, they can use the holder crypto airdrop model to try-
and onboard existing users to their new platforms. For example, long-standing NEM’s XEM coin holders received free Symbol (XYM) tokens upon its public Symbol blockchain launch. Another popular holder airdrop example is the crypto airdrop of HEX tokens to Bitcoin and Ethereum.
HARD FORK AIRDROPS
As the least common crypto airdrop model, projects may choose to use the hard fork airdrop model to offer coin holders the introduction of new blockchain assets during an update. In short, a hard fork update is when a blockchain project “splits” in terms of how it operates.
The chain splits when a new update is implemented, and a team cannot decide on one way forward. One chain continues to use its original asset. Then, the new chain will develop a new coin adhering to the new blockchain protocol standards.
With a hard fork airdrop, holders of the original coin usually receive an equal amount of a chain’s new coin. These will be directly deposited into users’ wallets.
The LUNA/LUNC, BTC/BCH, ETC/ETH hard forks are examples of such.
Some of the most successful decentralized finance (DeFi) platforms have used crypto airdrops to distribute their native tokens. Some of the largest crypto airdrops in history include the likes of Stellar, dropping $125,000,000 million worth of XLM tokens.
Also, the Bitcoin fork project, Bitcoin Cash (BCH), airdropped tokens to holders that peaked at around $4,300 per BCH. Plus, the smart contract mining project, Minereum, airdropped 32,000 native MNE tokens to each of the 1,197,634 million genesis addresses it collected.
The wallet address owners who held on to their free MNE tokens would have seen their MNE token balance peak at around $440,000.
On September 17th, 2020, Ethereum’s leading DEX, Uniswap, surprised its early adopters with a crypto airdrop of its ERC-20 governance token, UNI. For approximately 250,000 early-bird users of the pioneering DEX and automated market maker (AMM), the project distributed
400 native UNI tokens. During the time of the airdrop, the assets were worth around $1,400.
This was one of the most significant initial values of a crypto airdrop, with Uniswap setting aside $350 million for the airdrop campaign.
Using the exclusive airdrop model, the Uniswap airdrop event was notable for two reasons. First, Uniswap was one of the first projects to introduce a retroactive distribution model. Until 2017, crypto airdrops were usually used as a marketing tactic ahead of a project launch.
However, as the Uniswap project began to expand, the project released a governance token, ensuring decentralization and direction from its community. In addition, the dollar value of the UNI token airdrop at the time was significant.
Most projects until this point were airdropping users a more modest token value amount, which then often grew in dollar value as the project gained adoption.
Several months following the Uniswap airdrop on Christmas day, 2020, the leading exchange aggregator, 1inch, quietly made its first 1INCH token airdrop to early platform users. Within 24 hours, over 26,000 wallets had claimed more than 67 million tokens,
worth around $120 million at the time. As a result, some of the frequent early crypto traders on the aggregator became crypto millionaires overnight!
ETHEREUM NAME SERVICE (ENS)
Ethereum Name Service (ENS) offers decentralized human readable wallet names such as “myname.eth” to replace the long string of random characters (e.g., 0x9ejf8…). Launched in 2017, ENS sells a variety of domain names as non-fungible tokens-
(NFTs) that users can truly own as digital assets. In 2020, following continuous growth in adoption and popularity, the company decided to incorporate aspects of decentralization into its infrastructure. Accordingly, the project launched a decentralized autonomous organization (DAO) alongside a native ERC-20 governance token, ENS.
Then, the project airdropped a significant portion of ENS tokens to early-bird buyers of ENS domain names. This Airdrop also made many traders happy.
Pros and Cons of Crypto Airdrops
- If it is strategically coordinated, a crypto airdrop can be a relatively low-cost marketing campaign for businesses and blockchain projects.
- A well-timed crypto airdrop has proven to be a successful fundraising method and brand-awareness tool.
- Tasks for users to receive a free crypto airdrop are often incredibly arbitrary, requiring minimal effort (e.g., clicking “share” or “retweet”).
- For airdrop recipients, everyone enjoys receiving free crypto!
- Airdrops on some centralized exchanges and certain decentralized platforms are subject to KYC documentation requirements.
- Users may have to pay a gas fee to access their airdropped assets on very few occasions.
- Projects must strategically plan for a crypto airdrop launch to avoid an immediate sell-off of airdropped tokens.
- Some crypto airdrops are potential scams designed to gain users’ private keys and personal details. Although this happens few and far between, it is always worth doing your own research around the project of a token. Plus, make sure to verify the token contract address on a block explorer for the relevant blockchain.
Twitter Accounts to follow for Airdrop Update.
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