Crypto airdrop is the distribution of free tokens or coins to wallet addresses. This is a marketing strategy used by blockchain projects to increase the circulation of their tokens, increase awareness levels, and interact with the crypto community.
Why Do Projects Do Airdrops?
Marketing: Airdrops are an effective way for crypto projects to create buzz around their tokens.
Token Distribution: Airdrops can help distribute tokens widely, ensuring more decentralized ownership.
Community Engagement: Airdrops reward loyal users and encourage new users to participate in the project.
The following is an analogy about crypto airdrop to make it easier to understand.
Analogues:
Think of a crypto airdrop like a digital version of a food truck giving away free samples at a public event. The food truck wanted to attract more customers and spread the word about their delicious food. So, they distributed small portions to passersby. If the food is good, these people will probably become regular customers and tell their friends about it.
In the same way, crypto projects want to attract more users and spread the word about their platform or token. So, they distribute small amounts of their tokens to people who already own cryptocurrency or participate in their community. If the project is good, these people will probably become regular users and tell their friends about it. Like food trucks, the goal is to attract more customers and grow their business.
How do you stay updated about airdrops?
Join the crypto community: Participate in forums, social media groups, and chat platforms like Telegram or Discord, where crypto activists share information about upcoming airdrops.
Follow crypto news outlets: Stay informed by regularly checking the websites and social media accounts of crypto news outlets such as CoinDesk, Cointelegraph, and CryptoPotato.
Monitor blockchain explorers: Monitor blockchain explorers for new token transfers to your wallet.
Interact with the project on social media: Follow the social media accounts of crypto projects, especially their X accounts, and interact with their posts. This can help you stay in touch with information about potential airdrops.
Types of Airdrop:
Retrodrop: This type of airdrop is like a flashback from the past. This is a way for blockchain projects to reward early adopters or users who have contributed to the project in its early stages, usually when a user has incurred some monetary value from transaction fees or staking crypto assets. It's a way to say "thank you" to those who have been there since the beginning. The idea is to distribute tokens to users who have previously interacted with the platform, often before the token launch. One of the crypto projects that is doing a retrodrop is Arbitrum
Testnet: Airdrop testnet specifically for testing blockchain network functionality. A testnet is a version of a blockchain used for testing purposes, and testnet airdrops are used to encourage users to participate in this testing phase. Users are often given tokens to use on the testnet, which they can use to test the network's functionality. This token has no value outside the testnet environment. Testnet users will eventually get their tokens when the token is launched.
Holder Airdrop: This type of airdrop rewards participants simply for holding tokens or coins of a particular project. This kind of airdrop is often used when a project experiences a hard fork, creates two separate platforms, or launches on different blockchains. The amount of crypto distributed to participants is predetermined based on a snapshot of their wallet addresses.
Bounty Airdrop: In bounty airdrop, users are required to perform certain tasks to receive the airdrop. These tasks can range from simple actions on social media, such as retweeting a post or following a project account, to more complex actions such as writing a blog post or creating a video about the project. The idea is to create a buzz around the project and reward users for their efforts.
The newest type of airdrop is Megadrop from Binance. This is one of Binance's newest features which combines airdrop elements with Centralized Exchange (CEX).
Megadrop
Binance Megadrop is a new token launch platform that combines the excitement of airdrops and Web3 quests. This is a way for Binance users to get early access to certain Web3 projects before they are listed on Binance Exchange. By participating, users can earn rewards from these projects in the form of tokens.
To participate, users need to subscribe to BNB's Locked Products and/or complete tasks in their Web3 Wallet. The Locked BNB score is determined by the amount of BNB subscribed and the length of the subscription period. The longer the subscription period, the higher the score.
In addition to the BNB Locked Score, users can also increase their Total Score by completing Web3 Quests. This quest involves using the Binance Web3 Wallet to interact with various blockchain-based applications (dApps). Users are rewarded for their efforts with a score multiplier, which is then applied to their Locked BNB Score to calculate the Total Score. The first project featured on Binance Megadrop was BounceBit (BB). $BB
Link Megadrop: Megadrop
To provide a clearer example, here are some of the major airdrops of well-known tokens over the past few years.
Top 3 Airdrops based on amount of funds.
Uniswap (UNI)$UNI was the largest crypto airdrop, distributing $6.43 billion in UNI on September 16, 2020. This Uniswap airdrop was one of the biggest events during DeFi Summer, reigniting enthusiasm for the crypto airdrop model.
Apecoin (APE) APE had the second largest crypto airdrop, distributing $3.54 billion in APE on March 17, 2022. This Apecoin airdrop rewarded Yuga Labs ecosystem owners with up to 10,950 tokens, worth $258,737. By claiming and selling the token at $23.63, recipients can get a free Bored Ape Yacht Club NFT, which had an average floor price of around $200,099 before the APE airdrop.
dYdX (DYDX) was the third largest crypto airdrop, distributing $2.00 billion in DYDX on September 8, 2021. However, the full value of this DYDX airdrop will only be unlocked for five years, with parts being released in stages.
In 2023 alone there will be 2 big airdrops from Arbitrum and Celestia.
Arbitrum (ARB) executed the largest crypto airdrop of 2023, distributing $1.97 billion in $ARB on March 23, 2023. This airdrop was recorded to be 2.9 times larger than its closest competitor, Optimism (OP), which released $0.67 billion in OP on May 31, 2022. Leading up to the ARB airdrop, the Arbitrum ecosystem experienced significant growth, with total value locked (TVL) increasing by 147.2%, from $1.49 billion on January 1, 2023, to a peak of $3 .68 billion on May 6, 2023.
Celestia (TIA) executed the second largest crypto airdrop of 2023, distributing $0.73 billion in TIA on October 31, 2023. Unlike other airdrops, TIA's distribution did not involve a 'farming' mechanism. Instead, this airdrop targets specific groups: developers and researchers working on public goods and critical protocol infrastructure, the most active users on Ethereum rollups, as well as stakers and IBC relayers connected to Cosmos Hub and Osmosis.
