In the cryptocurrency industry, Airdrop is a powerful marketing strategy that helps projects attract interest and attention from the community. When a new blockchain project or platform is launched, Airdrop is often used as a tool to attract new users to join and explore the project's ecosystem. So what is Airdrop? Let's find out with Coin Review!
What is Airdrop?
Airdrop is a term used to refer to the free distribution of coins or tokens to early users of startup projects in the cryptocurrency field. This is an effective marketing strategy to promote the project, increase recognition and attract attention from the community.
What is NFT Airdrop?
NFT Airdrops work similarly to token Airdrops, but instead of receiving rewards in the form of coins or tokens, users will receive NFTs. To participate in NFT Airdrops, users may need to hold a certain amount of tokens or complete specific tasks to qualify for the NFT.
5 Types of Airdrops in the Crypto Market
1. Airdrop account registration
This is the most basic and accessible form of Airdrop. Users only need to register an account on the platform to receive Airdrop without having to perform any other tasks. However, since anyone can participate, the number of tokens distributed is usually on a “first-come, first-served” basis. Therefore, the value of tokens from this form is usually not high compared to other types of Airdrop.
For example, on March 30, 2023, RabbitX rewarded early registration users with a certain amount of RBX tokens as an Airdrop.
2. Bounty Airdrop
Projects often organize bounty programs in the form of bug bounties, art contests, or content creation about the project. Participants need to complete specific requirements to receive rewards, which can be project tokens or stablecoins such as USDT, USDC.
3. Retroactive Airdrop
Retroactive Airdrop is for users who have supported or used the project's products early. With this type, users are often rewarded with the project's own tokens to acknowledge their contributions.
Some common retroactive activities include:
Run nodes for blockchain projects.
Perform tasks on the dApp, like answering questions or entering trading competitions.
For example, Ethereum Name Service (ENS) gave away ENS tokens to users who registered .ens domain names, with a total Airdrop value of over $20,000.
4. Airdrop for coin/token holders or stakers
With this type of Airdrop, the project will take a snapshot and record the user's wallet balance over a certain period of time. Wallets that are holding or have staked a qualifying amount of tokens will receive the Airdrop.
Airdrop Tokens may include:
Tokens of Layer 1 blockchain networks, as in the case of Stellar Airdropping 19% of the XLM token supply to BTC holding wallets.
Project NFTs, for example Yuga Labs has given away 10,000 APE tokens to wallets that own BAYC and MAYC NFTs.
5. Hard Fork Airdrop
After the hard fork, the project will Airdrop the new version of tokens to users who own the old tokens.
Some typical hard fork events:
Bitcoin hard fork: The Bitcoin blockchain splits, creating new coins such as Bitcoin Cash (BCH) and Bitcoin Gold (BTG).
Ethereum Shapella hard fork: This hard fork event moved Ethereum from Proof-of-Work to Proof-of-Stake, creating the “ETHW” token.
Why Do Projects Do Coin Airdrops?
In the cryptocurrency market, the community plays a key role in the development of projects. Therefore, many projects conduct Airdrops to thank users who have experienced the product early and contributed to building the community. The main goals of Airdrops often include:
Project Promotion: Airdrop announcements make users learn about the project, use the platform, and share information widely. This helps the project attract attention and increase recognition effectively.
Building community and increasing interaction: Users participating in Airdrop need to complete tasks or use products, thereby creating an active community around the project, increasing interaction and sustainable relationships between the project and users.
Increase circulation: Airdrops allow projects to widely distribute coins/tokens, increasing decentralization and limiting the concentration of power in a few organizations or individuals.
Although the cost of Airdrops can be up to tens or even hundreds of millions of dollars, many projects still consider this an effective strategy thanks to its ability to attract users and build strong communities.
A typical example is Uniswap, one of the pioneering projects to implement Airdrop for early adopters. On September 1, 2019, Uniswap announced the Airdrop of UNI tokens to those who had previously used and interacted with the Unisocks protocol. The total Airdrop value was up to 2,592,000,000 USD with 252,803 recipients. Uniswap Airdropped 400 UNI to each early adopter wallet and still holds the top position among decentralized exchanges (DEX) in the crypto market.
What is Airdrop hunting?
To participate in an Airdrop, you will typically follow these steps:
Research and find projects: Research and identify projects that have the potential to do an Airdrop.
Prepare knowledge and support tools: Create necessary accounts such as Twitter (X), Discord, Telegram, along with a cryptocurrency wallet. At the same time, prepare coins/tokens according to the project's requirements (if any) and understand how to use the DeFi platform.
Interact with the platform: Use the product or perform tasks required by the project to qualify for Airdrops.
Stay tuned: Stay updated and wait for the results from the Airdrop.
What are the benefits and risks of participating in Airdrop?
1. Benefits
Airdrops can bring a number of benefits to users in the crypto space, including:
Potential Profits: Airdrops give newcomers the opportunity to make profits at almost zero cost.
Opportunity to improve crypto knowledge: New investors can experience and get exposed to a variety of projects in different areas of the crypto industry.
Enjoy multiple benefits from tokens: Airdropped tokens can provide multiple applications, such as service access, discounts, and participation in project governance, to optimize user experience.
2. Risk
Although Airdrop coin is considered as a form of free money making, there are still some risks and disadvantages involved such as:
Time: Some Airdrops require users to fully experience the product's features, which can be time-consuming and labor-intensive.
Transparency: Some projects do not provide transparent information about Airdrop results and token distribution, which can be confusing for participants.
Scam: Scammers can impersonate projects or create fake projects, send fake Airdrop information and ask users to provide wallet information (such as private keys or passphrases), thereby stealing users' personal information and assets.
Are Crypto Airdrops Safe?
Crypto airdrops run by reputable projects are generally safe. In most cases, the only information you need to provide is your wallet address, which is publicly available on the blockchain. However, you should also be aware that many airdrops can come from scams or illegal projects.
Notes when hunting Airdrop Coin
Below are some tips users should keep in mind to optimize efficiency and minimize risks when participating in Airdrop hunting:
Use a sub-wallet and avoid storing multiple assets: It is recommended to create a separate wallet for Airdrop purposes only, containing a small amount of assets enough to cover gas fees. Avoid storing multiple assets to minimize risks if the platform is hacked.
Do not share private keys: This is the “golden rule” in crypto. If any project asks for private keys, it is definitely a scam.
Create a separate email for Airdrop jobs: Helps reduce spam and reduces the risk of your main email being hacked.
Choose an Airdrop that suits your financial ability: Airdrops such as retroactive and bounty are suitable for people with little capital and a lot of time. On the contrary, holding and staking tokens are suitable for people with a lot of capital and little time.
Don't use the same password on multiple websites: When signing up for Airdrops on websites, you should use strong, different, and hard-to-guess passwords.
Double-check the link: Fake social media channels often change small details like adding a period or domain extension. Double-check the link before clicking to avoid falling into the trap.
Stay informed from official channels: This helps ensure that you get accurate and reliable information, avoid scams, and complete required tasks correctly.
Potential Airdrops You Can Check Out
Below is a list of top potential Airdrop projects in 2024 that you can refer to:
Pepe Unchained: Layer-2 chain on Ethereum with Pepe meme, $PEPU staking rewards. (purchase methods: BNB, ETH, Bank Card).
Crypto All-Stars: $STARS staking reward meme project, using “MemeVault” smart contract to maximize rewards (purchase methods: ETH, USDT, BNB).
Flockerz ($FLOCK): “Vote-to-Earn” DAO, allowing holders to decide on projects; 25% of total supply for $FLOCK staking (purchase methods: ETH, USDT, BNB).
MemeBet Token ($MEMEBET): Cryptocurrency casino for meme coins, airdrop and rewards for $MEMEBET holders (purchase methods: ETH, USDT, Bank Card).
Sponge V2: Meme coin with P2E feature and high staking rewards, has more than 12,000 participants and potential listing on Binance (purchase methods: Bank Card, ETH, USDT).
Shiba Shootout: High-interest stake battle project, players holding $SHIBASHOOT can stake to receive rewards (purchase methods: ETH, USDT, Bank Card).
Doge2014 ($DOGE2014): Dogecoin 10th Anniversary Token with PoS mechanism, 60% of total supply for presale with early bird discount (purchase method: presale)
Conclude
Through Airdrop programs, users can earn potential profits, experience new technology and participate in the project ecosystem without investing large amounts of capital. However, participating in Airdrop also has potential risks, especially when fraudulent projects appear. To optimize benefits and minimize risks, users should equip themselves with knowledge and understand what Airdrop is to be able to choose the most trustworthy project.
