Airdrops: Your gateway to free crypto
Find out how certain projects reward users with digital assets as part of their outreach efforts
Ready for freebies?
The crypto world has come up with an innovative way to raise awareness, generate excitement, and grow the user base—and it all starts with crypto freebies known as airdrops. These giveaway tokens can be likened to free samples (or Christmas presents) distributed in stores or even loyalty rewards given to prized customers.
Uniswap (UNI) made history with the largest crypto airdrop ever, distributing $6.43 billion worth of tokens on September 16, 2020. The token peaked at $42.88 at the time of the airdrop. The free token initiative made a mark in DeFi Summer, a crucial period in 2020 where decentralized finance (DeFi) surged in popularity.
Since UNI's free token initiative, the blockchain space saw a renewed interest in the airdrop model. According to CoinGecko, “since then, airdrops have become a key part of crypto.”
1/ @Uniswap remains the biggest airdrop, distributing $6.43 billion worth of $UNI in September 2020.
— CoinGecko (@coingecko)
The Uniswap airdrop was one of DeFi summer's biggest events. Since then, airdrops have become a key part of crypto.
Another notable airdrop case involved Bonk, a memecoin on the Solana blockchain. The project launched in late 2022 and has capitalized on airdrops for fostering community engagement and growth. According to Bitget, Bonk's airdrop was distributed strategically among developers and validators (5.3%), DeFi users (15%), and Solana NFT holders (21%).
15% airdrop (15 trillion $BONK) to 5,550 wallets that were early traders on @openbookdex just dropped.
— BONK!!! (@bonk_inu)
Still to come:
20T to announced NFT collections
10T to Collector wallets
Types of airdrops: Understanding the basics
For participants, crypto airdrops like these could serve as a gateway for receiving free tokens that may significantly increase in value over time.
Blockchain projects offer different kinds of airdrops with unique requirements.
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Standard airdrops: Participants are required to provide their wallet addresses to receive a certain amount of free tokens.
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Holder airdrops: Tokens are distributed as rewards to loyal community members or holders of certain cryptocurrencies.
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Bounty airdrops: Users should meet certain requirements to qualify. These may include tasks like sharing about the project on social media or joining Discord channels.
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Exclusive airdrops: Participants should be chosen or invited by the project's team in order to receive tokens. The criteria for selection may depend on influence, reputation, contribution, and expertise, among other factors.
The project team decides who is eligible for crypto airdrops. Requirements may include trading or holding a certain amount of the project’s native token, fulfilling certain tasks, joining community initiatives, and other standards.
Once participants meet the criteria for eligibility, the tokens are allocated to their crypto wallet addresses, which allows them to send and receive cryptocurrencies. Some projects distribute the airdrops manually, while others turn to smart contracts (agreements that carry out automatically once certain conditions are met) for automated distribution.
When participants receive the airdrops, they are free to manage their tokens.
To participate in a crypto airdrop, it is important to stay updated about the latest announcements, have a crypto wallet, engage with projects, fulfill requirements, supply information, and check for updates.
The benefits of crypto airdrops for participants are quite straightforward: free tokens. While the prices of these assets could fluctuate, there is a chance that they would grow exponentially over time, offering significant rewards for token holders.
How to stay safe: Avoiding airdrop scams
However, it is important to exercise caution when participating in crypto airdrops. Unfortunately, not every airdrop is legitimate.
Some airdrops turn out to be scams. In these schemes, scammers lure users in by directing them to third-party websites that may request personal information or crypto wallet access. This is a serious red flag that participants should not turn a blind eye to, as the scammers may end up gaining control of the digital assets.
In March, Floki Inu warned against fake airdrops, messages, and videos related to the FLOKI token, cautioning users that these were scams. Floki Inu clarified that it was not hosting any airdrops and warned that “connecting your wallet to these websites will result in the loss of your crypto.”
Beware of fake $FLOKI airdrop messages/videos/groups. They are SCAMS!#FLOKI is NOT doing any airdrops and does not intend to do any.
— FLOKI (@RealFlokiInu) March 11, 2024
Connecting your wallet to these websites will result in the loss of your #crypto. pic.twitter.com/dO0T0syzT3
To avoid falling victim to these airdrop scams, it is essential to DYOR (do your own research) and check the authenticity of the project and its announcement. Always countercheck sources with the project's official website and social media platforms.
It is also important to safeguard private keys (a unique code that allows users to access and manage their assets), seed phrases (a sequence of words that helps with wallet account recovery), and other sensitive information. These are important security measures.
Crypto airdrops play a significant role in the crypto world, offering a unique avenue for projects to promote their token and engage with the wider community. It is also the gateway for participants to earn free tokens. To maximize crypto airdrops and navigate them safely, always DYOR, remain informed, and never take security for granted.
