If you’ve been in the cryptocurrency space for some time, you’ve probably heard of crypto airdrops. In a nutshell, an airdrop is a marketing strategy that involves sending cryptocurrency to wallet addresses, usually for a small service – the goal of airdrops is to promote new tokens and get them into circulation.
Key highlights:
Airdrops are a marketing strategy where projects distribute free tokens to users, either as giveaways or in exchange for simple tasks.
There are various types of airdrops, including standard, bounty, holder, exclusive, retroactive, and raffle airdrops, each with different participation requirements.
To maximize airdrop earnings, stay updated on upcoming events, complete as many tasks as possible, and interact with projects even before an airdrop is announced.
Be cautious of scams, phishing attempts, and risky websites when participating in airdrops, and never share your private keys or sensitive information.
In this guide, we’ll explain how airdrops work, what types of airdrops are available, how to claim them, and how to participate safely to avoid potential scams.
What is a crypto airdrop?
Crypto airdrops provide free coins or tokens to users, either as a giveaway or in exchange for small tasks like sharing the project’s social media posts, holding a specific amount of existing cryptocurrencies, or joining their Telegram group. Of course, airdrops aren’t charity – they’re a marketing strategy. By distributing free tokens, projects raise awareness and get their tokens into circulation.
Besides, if users receive the tokens for free, they’ll be enticed to at least try the product. Airdrops manage to satisfy both the users and the project’s creators. Users receive free tokens that could potentially see massive gains in the future, and projects benefit by building a community of early adopters and generating buzz around their platform. Overall, it’s a win-win situation for both parties.
An overview of the top 8 biggest crypto airdrops in history. (Source: cryptorank.io)
How exactly do airdrops work?
The process of conducting an airdrop is decided by the project’s team, but it typically involves the following steps:
The team behind the project posts an announcement containing information about the upcoming airdrop event, along with participation requirements.
Users usually need to fulfill specific requirements to be eligible for the airdrop. These may include reposting social media posts, joining the project’s Telegram group, holding a specific token in their wallet, and other similar small tasks.
The project takes a snapshot of the blockchain at a set time and date to identify users who meet the airdrop criteria.
The project uses smart contracts to distribute the tokens to eligible wallet addresses – this is done free of charge and automatically.
Afterward, recipients are free to do anything they want with their new tokens. Most users choose to sell their tokens if they have value, while others hold onto them for the long term or exchange them for more established cryptocurrencies like Bitcoin or Ethereum.
Types of crypto airdrops
There are multiple types of crypto airdrops, each rewarding users for specific actions. Let’s go over the possible variations of crypto airdrops.
Standard airdrop
In standard airdrops, participants only need to express interest in the project to receive the airdrop, usually by simply providing a wallet address. These airdrops tend to be time-sensitive due to there being a limited number of tokens to distribute. While this may be the simplest type of airdrop, it’s also the most exploitable – nothing is stopping users from creating multiple wallet addresses to claim a larger portion of the airdrop.
Bounty airdrop
Bounty airdrops reward users for performing certain tasks, such as reposting social media posts, referring others to the projects social media channels, or following the project’s social media accounts. The amount of tokens users receive is usually proportional to the amount and difficulty of tasks they complete. A popular variant of bounty airdrops are Telegram airdrops – more specifically, there are many Telegram games in which players earn points which are convertible to tokens at a later date. While not all of these games are guaranteed to conduct airdrops in the future, we did compile a list of confirmed telegram airdrops.
Holder airdrop
Holder airdrops automatically reward users based on the type and quantity of tokens they hold, which is made possible by the transparency of the blockchain’s public ledger. In some cases, users may not even know they are eligible to receive the tokens.
Exclusive airdrop
As the name implies, exclusive airdrops are very specific, since only the most loyal users are rewarded. For example, users can receive rewards based on their time spent on the project, the number of forum posts, or money spent. This type of airdrop is designed to reward people who are closest to the project.
Retroactive airdrop
While not guaranteed, a lot of crypto projects conduct retroactive airdrops as a way to reward users for their on-chain activity based on their past interactions with an existing platform. This concept was popularized by Uniswap in 2020, with other DeFi projects like 1inch Network and dYdX adapting the concept shortly after.
Raffle airdrop
Lastly, raffle airdrops occur when the number of interested users exceeds the number of tokens the project wishes to airdrop. Essentially, standard, bounty, and holder airdrops can all turn into a raffle airdrop, which means that only a limited number of wallets will receive the airdrop.
How to increase your crypto airdrop earnings
Participating in crypto airdrops is one of the ways users can earn cryptocurrency without cost. Here are some additional tips to help you maximize your airdrop earnings:
Find information about upcoming airdrops by checking airdrop websites, participating in discussions on forums, and following crypto influencers. Stay up to date on the project by regularly checking its social media channels.
If the project rewards users based on points, don’t do the bare minimum – earn as many points as possible to maximize the amount of tokens you’re eligible to receive. You can learn more in our guide about airdrop farming.
Interact with projects, even if they haven’t announced an airdrop yet – a lot of platforms conduct retroactive airdrops to reward users for their past on-chain activity.
Avoiding airdrop scams
Because of the sheer popularity of airdrops and their promise of free cryptocurrency, there have been many projects looking to scam users by pretending to run airdrops.
Do your own research: Before engaging in an airdrop, thoroughly investigate the project and the team behind it. Look for user reviews and ensure the project has undergone an audit by a reputable security firm.
Beware of phishing scams: Phishing scams aim to steal your personal information or private keys. Avoid clicking on unsolicited links or emails about airdrops, and only access official project channels for information.
Ignore unsolicited offers: Legitimate airdrops are usually announced on a project’s official website or social media. Be cautious of offers that seem too good to be true or come from unknown sources.
Protect your private keys: Your private keys are critical for accessing your cryptocurrency and should never be shared with anyone, regardless of their claims to represent a legitimate project.
Use a secure wallet: Always store your cryptocurrency in a secure wallet that you control, rather than on an exchange, preferably a hardware wallet. Exchanges are frequent targets for hackers, making personal wallets a safer option.
The bottom line
Crypto airdrops are a great way to earn free cryptocurrencies, as long as you’re careful about the potential pitfalls like phishing scams. Also, because of their nature, the airdropped tokens might not be worth much, if anything, except in some rare cases. You need to consider if airdrops are worth the time, effort, and risks compared to the potential rewards.
Now that you’re armed with the knowledge needed to safely participate in airdrops, here is a list of the best crypto airdrops currently available. Also, if you’re interested in airdrops, you’ll likely be intrigued by our guide explaining how to buy new crypto before listing.