What is Crypto Airdrop?????????
Crypto airdrops have been around for years and many people have already made a lot of money from them. However, since the Aptos airdrop last week, the topic seems to have really picked up steam. The “Airdrop Narrative” is all over Twitter. Accounts publishing airdrop strategies are growing faster than they post the next strategy, Telegram groups are forming to hunt airdrops together, and also projects are developing strategies to profit from the hype. With this article, we would like to explain the different types of airdrops and what the advantages and disadvantages are.
Airdrops
Airdrops are a marketing tactic used by cryptocurrency entrepreneurs and projects. Tokens are given to current crypto traders as a form of promotion or as a free token to be stored in their wallets.
Airdrops can be used by businesses to promote their platform and encourage users to subscribe to their newsletters, follow them on social media and get more people trading the token, when it lists on an exchange.
Airdrops are also often used by companies, brands, and entrepreneurs to reward existing holders, investors, and collectors. These individuals may receive tokens, currencies, or assets for free depending on the amount they invested or contributed to a particular project.
Types Of Airdrops
Crypto projects may offer free cryptocurrency in different circumstances, but their primary goal is to encourage users and get attention. Let’s have a look into the different types of airdrops.
Standard Airdrop
Typically, standard crypto airdrops involve participants expressing their interest in receiving the airdrops. These airdrops require a wallet address, and very often no additional information.
There is usually a limit to how many tokens an individual can receive in a standard airdrop. It is therefore necessary to consider the time-sensitive nature of this kind of airdrops. Despite their popularity, these types of airdrops may be more difficult to obtain because it is easy for a single user to create multiple wallets to rapidly drain the total airdrop amount.
Bounty Airdrop
The recent Aptos airdrop falls under this category. Users who had completed an application for an Aptos incentivized testnet or users who minted an APTOS:ZERO testnet NFT were eligible to claim free $APT.
This basically means, that when users complete certain tasks, they can receive bounty crypto airdrops. Besides participating in the testnet, other common ways to receive a bounty airdrop are postings on social media and tagging the company, or retweet recent tweets about the project.
It is also possible to receive referral bonuses or finder’s fees for people, who recruit other users with their personalized referral link.
Bounty airdrops often come with a point or ranking system, that correspond to how large the airdrop will be for every individual participant.
Holder Airdrop
Holder airdrops are exactly what their name conveys. It depends on who is holding existing tokens and how many tokens they hold. These airdrops are very transparent, since everybody can see how many token a wallet holds and how much it received with the airdrop.
The disadvantage of holders airdrop is, that very often only the holders with large bags receive an airdrop, that is worthwhile and people, who don’t hold a lot of token but interact a lot with the protocol are excluded from it. The next type is targeting this problem.
Exclusive Airdrop
Exclusive crypto airdrops are holder airdrops in which specific individuals are personally selected for the airdrop. They may be selected not based on their token amount, but on other factors, such as the amount of time they spend on a project, the amount of money they spend on non-token activities, or the number of posts they make in forums. In an exclusive airdrop, airdrops are also given to wallets that may not hold any tokens, creating an even centralized way of rewarding those closest to the project.
Raffle Airdrop
Often projects also hold raffles for airdrops. Here again, the conditions of participation can vary greatly. From a point system, where you have to fulfill certain tasks, to simple social media raffles, to activity in the Discord channel of the project, everything is possible.
Advantages Of Airdrops
An airdrop is an attempt to stand out from the crowd, given the intense competition among cryptocurrency startups. It can also encourage the use and adoption of newly issued token and even opens the field of revenue streams for businesses dedicated to crypto airdrops provide alerts to users, listings to startups, and marketing services to help them fine-tune their airdrops.
Depending on the blockchain network, certain crypto airdrops can also reward loyal contributor, which had an early stake in the project. Additionally, airdropping tokens to wallets or existing token holders distributes them in a way that may not happen naturally in an open market.
But as always, there are also disadvantages
Disadvantages Of Airdrops
The biggest disadvantage of airdrops are the security threats, when wallet holders must connect their wallets to suspicious sites, to claim their airdrop.
Of course the project behind the airdrop can just a pump and dump scheme and even before you can claim your airdrop the value of the token drops radically and you just participated in the project’s marketing campaign by posting their profiles on your social media accounts.
In some cases, the token you claimed is not tradeable, since there’s no liquidity on the exchange because the project couldn’t gain enough traction during the go-to-market phase or again you were just used for the marketing strategy of the project.
Conclusion
A well-designed and properly applied airdrop can bring a lot of attention to a project or reward long-time users.
However, you should always be careful which airdrops you participate in, as they can quickly become a simple scam where participants can lose more than just their time.
Therefore, we always advise you to only participate in airdrops from solid projects and never connect your wallet to a site that looks strange or fraudulent.
