What are crypto airdrops?
Crypto airdrops are when a project gives away native tokens to wallet addresses that meet predetermined rules. Airdrops occur when a protocol has not issued tokens and wants to reward early adopters and participants in the ecosystem and community.
Cryptocurrency airdrops are usually a surprise, as people outside the team usually don’t know if and when the project will deliver tokens, as well as the scheduled eligibility rules and “snapshot” times. But there have been many airdrop projects, and we have some understanding of these requirements and future projects.
People ask why projects do airdrops instead of doing an ICO or exchange offering. It’s because airdrops can better incentivize the community and early adopters while increasing the liquidity of the token.
Well, there are many benefits to crypto airdrops.
Why do projects decide to airdrop their tokens?
Easy to bring tokens to market
The launch of a token may bring a series of different challenges, which need to be carefully considered by the project team. In fact, the token launch process has the potential to become a double-edged sword, directly determining the success or failure of the entire project.
The severity of these challenges will depend on the purpose and nature of the token itself, but one of the main concerns is whether people will be willing to invest in and/or trade the token. Even if you have the most outstanding protocol, if the value of the token continues to drop and cannot find support, this may deter future users.
On the other hand, by airdropping tokens to active users, the team can directly provide tokens to their target users. Although many of these users may quickly sell these tokens, some will choose to keep them and use the product. This is a way to build a customer base.
Effective Marketing
In the cryptocurrency space, few things can create as much excitement as a well-designed airdrop. There are countless examples of this phenomenon, with Arbitrum being the most prominent. The crypto community has been discussing airdrops since the moment the network went live, with many users actively participating in various tasks and interacting with the Arbitrum dApp, with the sole purpose of qualifying for a future airdrop that may or may not occur.
Cultivating strong communities
The above situations also tend to create strong communities. People who suspect an airdrop may be in the cards will spend more time using the protocol, interacting with other users, and even donating to grants associated with the project.
Can You Make Money From Crypto Airdrops?
Airdrop hunting has become a fairly lucrative endeavor, with many users investing their time in protocols that have yet to issue tokens. However, doing this effectively and making a sizable contribution is not easy and requires a deep understanding of how to use various DeFi protocols.
It’s worth noting that many platforms may not ultimately issue tokens at all. This means you may end up paying in time and money without getting anything in return.
Airdrop hunting also carries some risk of making costly mistakes when dealing with large amounts of airdrops. However, based on most airdrops from major platforms to date, you probably don’t need a ton of capital to qualify for a large amount of tokens.
The most successful crypto airdrops
There have been hundreds of airdrops that have occurred over the past few years, but for the sake of this guide, we’re going to take a look at the three biggest ones that had the biggest impact.
Uniswap’s UNI Airdrop
Uniswap's airdrop is the first large token distribution in the Defi era, covering the platform's old users. Eligible users, including liquidity providers, traders, and users who hold or redeem SOCKS, received a total of approximately $450 million worth of UNI tokens. Each old user received an average of approximately $1,200 worth of UNI tokens, with a maximum of nearly $18,000.
Optimism’s OP Airdrop
On May 31, 2022, Ethereum scaling solution Optimism issued the OP token through an airdrop. A total of 231,000 addresses were eligible to claim 214 million OP tokens, with an average of 930 OP tokens per address. The token started trading at $1.3, and eligible users received at least $1,200. The OP token once peaked at $3.22, and at the highest price, the airdrop was worth more than $3. Optimism recently conducted another airdrop, with users receiving an average of about 30 OP tokens. The team will continue to distribute tokens until 19% of the supply is airdropped to eligible members.
Arbitrum’s ARB Airdrop
The Arbitrum airdrop took place on March 23, 2023, distributing 13% of the total supply to specific users and DAOs. The minimum amount received was 1,250 ARB and the maximum was 10,250 ARB, depending on the number of tasks performed by the user. The starting trading price of the token was $1.2, and it was expected that everyone who received the token would receive a net gain of at least $1,500.
How to Find the Best Crypto Airdrops?
Several websites provide free aggregate information about various protocols.
The network filter list selects projects with a large amount of value locked, which shows that the protocol is trusted by many people, reducing the chances of being a scam.
Find a protocol that hasn’t launched a token yet and start using it. There is no clear way to do this.
Fortunately, based on previous airdrops, we have a pretty good idea of what these events might look like. These might include, but are not limited to:
Trading over a period of time, i.e. trading in different months
Conduct transactions exceeding a certain number.
Use the platform to interact with one, two, three, or more smart contracts
Make transactions with a total value of more than $1,000 (as well as $2,000, $10,000, etc.)
Depositing funds into the protocol
Providing liquidity
Exchange Tokens
Buy and sell NFTs
Bridging funds into the protocol
The list could go on and on. The best approach is to identify a protocol and try to use it as much as possible, just like you would if you were not airdrop hunting. Also, get involved in the project's community. There you will surely find the best way to interact with the protocol. Think about it, if the time comes and the project decides to airdrop its native tokens, it wants to reward its most active users.
Are Crypto Airdrops Safe?
This is a very important consideration. Not all airdrops are safe. There are many profitable airdrops, but there are also many scams - just like all cryptocurrencies. You have to be extremely careful.
Many scammers will try to capitalize on the excitement around an airdrop, tricking people into connecting their wallets to malicious dapps and draining their funds.
When looking for airdrops, you should apply the same scrutiny as you would for everything else.
Note: Safety tips that must be read before participating in the airdrop
1. Make sure the project you are interacting with is legitimate to avoid being scammed.
2. Airdrop hunting requires investment, so pay attention to the related fees.
3. Isolate new ERC20 addresses for each airdrop to prevent losses.
4. Be wary of phishing and only interact with official websites.
in conclusion
Hunting for airdrops can be a very lucrative endeavor and does not require a large investment to get started.
At the same time, it is also important to remember that this is not a get-rich-quick scheme and it takes considerable time, knowledge, and effort to do it effectively.
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