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A must-read series for Web3 newcomers: What is an airdrop? How to farm big gains?

What is an airdrop?

In simple terms, an airdrop is a 'free token' given by Web3 projects to users. Like a pie falling from the sky, but there are always considerations from the project team behind it. Just like a newly opened milk tea shop offering 'a free cup of milk tea', the goal is to attract traffic and promote the brand. The purpose of Web3 project airdrops is also to encourage more participation and form a user group.

🛠️ An example: Uniswap airdrop

In 2018, there was a decentralized exchange called Uniswap, which at that time directly airdropped 400 UNI tokens to each address to thank early users! At that time, the price of UNI was only a few dollars, but later it peaked at 40 USD, meaning if you received this airdrop and held on without selling, you would have made 16,000 USD! 💰 (Yes, that's over 100,000 RMB, enough to buy a car!)

Therefore, farming airdrops is not just doing work for nothing, but an opportunity to potentially 'eat industry dividends'. Although big gains like Uniswap are rare now, seizing a similar opportunity might just secure your 'first pot of gold'.

Why do project teams airdrop?

Cold start demand: attracting users. What if a project just starts and no one uses it? Rely on airdrops to attract users to 'farm the wool', generating heat.

Incentivizing ecological prosperity: enabling more people to hold tokens, interact more, and use products. The more users there are, the better the ecology, and the tokens become more valuable.

Expand publicity: Use free methods to let more people know about it, like after Uniswap's airdrop, it became popular for a whole year, directly becoming an industry benchmark.

What can newcomers learn from airdrops?

Establish cognition: By participating in different projects, you can understand various Web3 sectors (such as DeFi, Layer2, NFT, etc.), clarify which projects are reliable, and which are worth long-term attention.

Methodology + Practice: Farming airdrops is a series of small experiments teaching you how to use wallets, how to interact, and how to manage funds.

Positive feedback: Even if you didn’t get a big gain, the accumulated experience and methods will make you more perceptive. The process of farming tokens is like leveling up in a game, learning while earning, growing step by step!

So how do you specifically operate to farm airdrops?

Farming airdrops can actually be divided into three steps: select projects, experience interaction, and be well protected.

Select projects:

Target leading projects (high success probability) or potential new projects.

Leading projects: like Arbitrum and Optimism in the Layer2 track, they have high ecological status, many people are airdropping, but the rewards are also significant.

New projects: For example, zkSync, which became popular in 2023, had rumors early on about launching tokens, and many people positioned themselves to interact in advance, resulting in successful airdrops.

Experience interaction:

Most airdrops require you to have on-chain interactions with the project, such as: depositing or lending on DeFi projects; using decentralized wallets to send transactions;

Transfer or trade on new public chains. Each step must be operated carefully like a real user; the project team will decide whether to distribute airdrops based on interaction frequency and depth.

Be well protected:

Airdrops also come with risks, such as:

Phishing scams: Some projects will pretend to distribute airdrops, leading you to authorize your wallet, and end up stealing your coins!

Fund isolation: Use different wallet addresses to avoid detection of 'wool farming' behavior by the project team.

Cost control: Pay attention to gas fees (on-chain transaction fees), clearly calculate whether the cost of farming tokens is worth it, and don’t turn it into a losing business.

Another classic case: Arbitrum airdrop

In 2023, Arbitrum distributed its ARB tokens, with a total value exceeding 1 billion USD! Some people received rewards worth thousands of dollars through simple on-chain interactions.

How to get it?

Completing transfers or contract interactions early on the Arbitrum network;

Try DeFi, NFT, and other applications on Arbitrum, stay active.

This airdrop made many people realize how important it is to layout ahead for a potential project! So, newcomers can now pay attention to new projects like zkSync or StarkNet, interact in advance, and who knows, the next 'billion-dollar airdrop' could be yours!

Novice musings

While farming airdrops may not make one rich overnight, it is indeed a good method for Web3 newcomers to quickly get started. It allows for skill development, broadening knowledge, and also the chance to reap industry dividends, so why not?

🧐 What’s the biggest gain you’ve ever had? Or which project do you think has airdrop opportunities next?