Airdrops are a promotional activity employed by startups in the cryptocurrency market to help launch their digital currencies.
The main aim of a token airdrop is to spread awareness about the project and to get more investors to trade it when it’s listed on exchanges as an initial coin offering (ICO).
This article is a guide to everything you need to know about crypto airdrops. We will explore what it is, how it works, its types, and how to get your hands on a token airdrop event.
So, without further ado, let’s get started.
What is a Crypto Airdrop?
Simply put, airdrops are events where the team behind a cryptocurrency project deposits a certain amount of tokens into your wallet for free. There are several reasons why token developers employ an airdrop:
How Do Airdrops Work?
Airdrops are generally promoted by the cryptocurrency or blockchain project on their company website, social media, and crypto forums.
Typically, there are certain criteria that one must meet to be eligible for an airdrop.
These requirements are determined by the project, such as the need to hold a minimum quantity of the tokens in their wallet or perform a certain task on behalf of the project like promoting it on social media or writing a blog post about it.
Moreover, tokens are only sent to wallets that are based on the blockchain supporting the assets or to wallets that already hold the tokens.
In any case, you must have a compatible crypto wallet to be able to receive the tokens.
When an airdrop is announced, there are two specific dates that you need to be aware of.
The first is the “snapshot” time, which is the moment when the token project takes a screenshot of all the wallets that are eligible for the airdrop. It is important to make sure that you fulfill all the specified requirements before that date.
The second is the distribution date, which signifies the time when you can expect the airdropped token to reach your wallet.
Types of Airdrops
There are three main types of crypto airdrops:
- Standard / Raffle Airdrops
These are airdrops that generally require you to complete some sort of registration to become eligible to receive free tokens. Raffle airdrop is the stereotype of crypto airdrops that we have come to know.
It requires some sort of work on behalf of the token issuer. However, if a particular project has a high demand for its token airdrop, it will sometimes choose which wallets are eligible based on a raffle system.
- Bounty Airdrops
Bounty airdrops require you to complete a specified set of tasks to be eligible for an airdrop. This can include promoting the cryptocurrency on social media, becoming a member of its online community, signing up for the project’s newsletter, using referrals to get friends and family to sign up for its newsletter, or even providing software and coding support.
Bounty airdrops are not completely free and require those aiming to qualify to make some sort of contribution to the project.
- Exclusive Airdrops
Crypto projects sometimes reward their most loyal community members by airdropping new tokens to their respective wallets that already hold the cryptocurrency.
Although this may sound like a free money perk, it is not as simple as it sounds. Those who qualify for an exclusive airdrop have to first prove to the project’s development team that they have held the tokens through periods of high volatility.
How To Claim Crypto Airdrops?
Here are a few ways to claim a cryptocurrency airdrop.
- Set up a crypto wallet
To participate in crypto airdrops, you must have a wallet that is on the specific blockchain that supports the token and facilitates its distribution. Always go for wallets that are compatible with the token you are interested in.
- Research the project and its requirements
Once you encounter a successful cryptocurrency project without a token, be ready for an airdrop opportunity. Do your research about the project and try to get all the information that is available about it, like their team, whitepaper, roadmap, and community.
- Meet airdrop requirements
To be eligible for an airdrop, you must meet all the requirements suggested by the project. If you assume that a given project will be making an airdrop announcement in the future, then you can increase your chances of qualifying by becoming an active member of the community.
When the project does announce the drop, it will prioritize rewarding those who have been actively participating in its development from the beginning.
- Protect your privacy and ensure security
Scammers are known to imitate popular crypto projects and promote fake token airdrops to steal your personal information or funds. Therefore, it is important to verify the legitimacy of an airdrop by visiting their official website, social media accounts, or forums.
Always be cautious when sharing your personal information during the airdrop process. If the project is legitimate, they will only ask for minimal information like your email address or social media username.
- Claim your airdropped tokens
Once the airdrop distribution begins, follow the instructions provided by the token project to claim your coins and receive them in your wallet. These may involve signing a transaction with your wallet, providing them your wallet address, or completing other verification procedures.
- Manage your airdropped tokens
Once you have received the airdropped tokens, it is time to manage them properly. You can choose to hold the tokens, sell them on exchanges, or stake them within the ecosystem to protect its network. It is crucial to have a clear understanding of the token’s utility, market value, and potential risks before making any investment decision.
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