WHAT IS CRYPTOCURRENCY AIRDROP?

Good day to you, friends and members of our CryptoPrime community!

So, let's begin! The number of new coins is constantly growing, making it difficult for crypto investors and traders to keep track of emerging projects. In this regard, some cryptocurrency projects conduct airdrops in order to stand out from the rest and spread the word about themselves. And while everyone loves free cryptocurrency, not all airdrops are safe. Let's look at how they work and what you can do to protect yourself from fraudulent airdrops.

CRYPTOCURRENCY AIRDROP is the transfer of digital assets of a crypto project to several wallets. This way, developers can distribute coins and tokens among current or potential users and advertise the project. As part of airdrops, tokens are issued for free, but in some cases you must complete certain tasks to receive a prize. Cryptocurrency airdrops became popular during the initial coin offering (ICO) boom in 2017 and continue to be used today as a means of promotion.

HOW CRYPTOCURRENCY AIRDROPS WORK. There are several types of cryptocurrency airdrops, but they typically involve distributing a small amount of cryptocurrency across multiple wallets (usually Ethereum or Binance Smart Chain). Some projects give away NFTs instead of regular cryptocurrency, although this is less common. Sometimes projects distribute cryptocurrency for free, and sometimes they ask you to complete certain tasks: subscribe to an account on a social network, subscribe to a newsletter, store a certain number of coins in your wallet, and so on.

Fulfilling the conditions does not always guarantee receipt of tokens. In some cases, a prize is given only to those wallets that interacted with the project platform before a certain date. This method was used by 1INCH and Uniswap to support early users, but unlike other common airdrops, their prizes were worth thousands of dollars.

WHY DO CRYPTO PROJECTS CONDUCT AIRDROPS. Blockchain projects are giving away free tokens in an attempt to expand their reach and increase the number of users. The more holders, the more reliable the token looks and the more decentralized the project is. Airdrops also motivate recipients to use and promote the project, which can increase the initial user base before listing on a crypto exchange.

TYPES OF AIRDROPS

- AIRDROP WITH REWARDS In airdrops with rewards, users must complete certain tasks, for example, repost a project publication on Twitter, subscribe to the official Telegram, or write a post on Instagram and tag several friends.

- EXCLUSIVE AIRDROP In an exclusive airdrop, cryptocurrency is transferred only to certain wallets. As a rule, to receive a prize, you need to be an active member of the community or one of the first supporters of the project.

- AIRDROP FOR OWNERS In the airdrop for owners, free tokens are awarded to users who hold a certain amount of currency. To conduct such draws, the project team usually takes a snapshot of users’ crypto assets at a specific date and time. If the wallet balance meets the minimum requirements, the user can claim free tokens according to their amount of assets at the time of the snapshot.

HOW TO AVOID FRAUDULENT AIRDROPS. Distinguishing a reliable airdrop from a scam one can be difficult. Always do your own research before entering any giveaway, especially if it requires you to connect your wallet to the site. Sometimes attackers transfer tokens to multiple wallets and empty them when recipients try to transfer funds to a cryptocurrency exchange or another wallet. In some cases, scammers conduct an airdrop on a phishing site that looks official and convinces you to connect your wallet. Sometimes attackers ask to transfer cryptocurrency to an unknown wallet address in order to unlock free tokens.

Secure airdrops never ask for funds or a seed phrase. Be careful with emails and personal messages. To avoid fraud, study the official website and social networks of the project. Bookmark the official links and make sure that these channels are actually giving away assets. If you don't know anything about the project, find out what the crypto community thinks. If you can't find enough information, it's probably best to just ignore this airdrop.

SUMMARY. Cryptocurrency airdrops allow crypto projects to stand out and recruit participants in the crypto space. They can be a good way to grow your portfolio with new tokens, however there are likely to be more scam airdrops than safe ones, so be careful and always do your own research before participating.