Airdrops are a method of distributing tokens to users. With the help of these, they can generate some echo around a project, or reward users, or create a new community.
The lifespan of a project depends on its ability to attract users. This is no different for crypto projects, but the projects here have a unique advantage. Blockchain projects can create their own tokens, with which users will be able to use their products later. One of the most important ways to distribute tokens is a technique called Airdrops.
What are Airdrops?
The term Airdrops comes from air supply. In ordinary language, this means that troops, equipment or supplies are sent by air to certain areas, where they are delivered by parachutes.
Things work similarly in the crypto world, only here everything takes place online and tokens are sent to users. Airdrops can be used for many things.
Loyal customers can be rewarded
There can be some hype surrounding a project
Potential customers who are open to new products or services can be identified
Project followers can be incentivized to perform certain tasks that help it grow, whether it's sharing social media posts or creating an account on a platform.
How do they work?
We generally classify them into two different groups. There are pre-announced Airdrops and there are those that are not announced .
Announced Airdrops are usually available at a predetermined time and are used to create hype. In such cases, users are often given some task, which they receive a reward for completing.
Airdrops that are not announced in advance are all randomly selected. This is usually used to delight and surprise users.
How can you find out about them?
An entire industry of forums has sprung up to help people figure out how to participate in Airdrops. However, companies also use their own distribution channels, such as Telegram or Medium, to inform users about upcoming Airdrops.
Who uses it?
It is popular with both large and small projects. Binance, for example, used this technique in 2017 to gain attention. And Dfinity's smart contract blockchain project issued $35 million worth of tokens during an Airdrops.
In 2020, the decentralized exchange Uniswap created and distributed UNI tokens to everyone who used the service. The goal then was to decentralize the DEX protocol. UNI holders can now vote on what to do with the UNI tokens in their wallet or what changes to make to the protocol.
So did people with the Ethereum Name Service web address in 2021, as this protocol also moved toward decentralization.
What are your limitations?
As Airdrops have grown in popularity, so have concerns about their validity as a way to build community. Some critics have argued that the indiscriminate nature of token distribution does little to foster an active community.
Many Airdrops owners stick with the tokens and do little to maintain and expand the network after tempers die down. In the United States, this type of practice has raised questions about tax liabilities and whether they represent income or capital gains.
Within Web3, some people feel that people don't care about projects, they just want tools that they can exchange for money later.
What does the future hold?
Airdrops are becoming an increasingly popular form of marketing blockchain projects. However, US regulations may make it difficult for American projects to offer Airdrops.
But a more deliberate approach to token distribution seems to be where the industry is headed right now. In the meantime, the popularity of Airdrops will continue.
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