What is a Crypto Airdrop? Here’s Everything You Need To Know

What is a Crypto Airdrop?

A crypto airdrop is a marketing tactic where new coins or tokens are given out for free to various wallet addresses. This often involves sending small amounts of the new digital currency to the wallets of active members within the blockchain community. Sometimes, these tokens are given in exchange for simple tasks, like sharing or retweeting a post from the company launching the currency.

However, the goal of a crypto airdrop is to raise awareness for new projects and services rather than to persuade the receiver to spend money. The fundamental concept is to transfer newly created tokens to hundreds or thousands of different wallet addresses in the hopes that receivers will be more likely to take part in the project.

Types of Crypto Airdrops

Crypto airdrops can be classified into four main categories:

• Standard Airdrop
• Holder Airdrop
• Bounty Airdrop
• Exclusive Airdrop

Let’s discuss about each of them in detail:

Standard Airdrops

Standard airdrops involve distributing free tokens to a wide range of wallet addresses. These airdrops are typically announced in advance and are open to anyone who signs up. For the purpose of receiving airdrop, an individual must have a valid wallet address.

There are time-limited standard airdrops too where a set amount of tokens are distributed within a specific time frame. Because of this, users create multiple wallet addresses to quickly drain the airdrop amount and can get benefitted as much as possible.

Holder Airdrops

Holder airdrops generally reward existing holders of a particular cryptocurrency with new tokens. To qualify for the rewards, the user must have a specific amount of pre-defined cryptocurrency in their wallets. The new tokens are then distributed proportionally based on their holdings. As wallets and blockchain details are available as a public distributed ledger, so everyone has equal and complete transparency into wallets and distribution of tokens.

This type of airdrop incentivizes holdings and supports the value of existing cryptocurrency. Although, holder airdrops ensure that the highly invested individuals should receive the benefit. If someone is not having a specific amount of crypto in the wallet, then the award amount gets pro-rated.

Bounty Airdrops

In bounty airdrops, users are required to complete certain tasks to earn tokens. These tasks may include social media activities like liking, sharing posts, joining multiple forums, or writing articles. The motive behind this is to increase awareness about the project. Once these tasks are verified, users get their tokens.

There is also a scheme of referral bonus where if any user gets on-boarded as a new user on the project, they may get a certain amount of tokens. Here also, users are required to have a certain amount of points to qualify for the rewards.

Exclusive Airdrops

Exclusive airdrops targets a specific group of users, often those who were the early supporters for the project or active community members. There are certain factors to be selected for the rewards in exclusive airdrops rather than a fixed amount of tokens in the wallet, such as time spent on the project, money spent on the promotional activities, or the number of posts on social media for promotion.

The only goal of this airdrop is to reward loyalty and encourage continued engagement. It also helps in retaining users and fostering a strong dedicated community.

Why do companies do crypto airdrops?

Companies do crypto airdrops primarily as a marketing strategy to generate interest and awareness about their new crypto project. By distributing free tokens to the users, they want to create buzz in the market for high attention and less competition in the market. This initial distribution helps to build a strong user-base and encourages users to learn more about the project, potentially turning them into long-term supporters and investors. Airdrops effectively use social media for the purpose of promoting their new token and create excitement among other users.

Another reason for conducting crypto airdrops is to incentivize users and engagement within the community. By rewarding users with tokens for multiple tasks like social media sharing, forum discussions, etc. creates a more engaged and active user base. These tasks not only help in promoting the project but also creates a sense of involvement and ownership among participants. This engaged community can provide valuable and genuine feedback, support the project’s growth, and contribute to the overall success.

How to profit from crypto airdrops?

There are multiple ways in which users can get benefitted from crypto airdrops and can earn huge profits with strategy. Some of the recommended steps to maximize your earnings include:

Join Active Communities

Always join the active communities on Reddit, Telegram, and Twitter to get informed about all the new crypto projects that are getting launched. This can help you in acquiring early information and an option to become an early investor in some new crypto airdrop project to maximize your earnings too.

Qualify for the Eligibility Criteria

There are specific requirements for each airdrop which should be met by the users to receive tokens. This may include having a limited amount of fixed cryptocurrency in the wallet, completion of simple social media tasks, or signing up for newsletters. These conditions should be satisfied for receiving tokens from a new crypto project.

Active Participation

For some airdrops, active participation in the project’s community or ecosystem might be required. This could involve staking tokens, using the platform’s services, or being active in the discussions. This active involvement can give additional rewards to you in return.

Claim and Monitor Tokens

For your active participation and involvement on social media for promotions, you definitely get extra rewards from the project. But once you receive the crypto tokens, monitor their value and market performance. Look out for the peak time, so that you can make the maximum profits out of it. Some tokens might quickly gain value and be sold for a profit, while others might be worth holding onto for a long-term gain.