What are Crypto Airdrops & How to Prepare for them?

Introduction to Crypto Airdrops:

Similar to obtaining any assets, crypto tokens are invested in by investors or traders to incur gains, while investing in established tokens is the road mostly travelled by, crypto airdrops is a simple and easy marketing strategy that gives new projects exposure in the market. To further explain the crypto airdrop process, there involve blockchain-based projects and developers to send out free tokens to members of their communities. This initiative is usually a part of a broader marketing initiative.

As the crypto projects are mostly community based, the process of airdropping crypto tokens, is mainly taken up in order to send newly minted tokens to hundreds or maybe thousands of different wallet addresses with the thought process that the recipients will be more inclined to engage with the corresponding project. This is the reason why crypto airdrops are an inexpensive way for investors to make some additional returns on their portfolio.

The concept of crypto airdrop is more like a marketing strategy as it is similar to one finding a free discount card in their mailbox which encourages them to go give a visit to a new store that has opened in the area. Usually crypto airdrops are promoted on the company’s website, social media, and crypto forums and the tokens are sent to only certain specific wallets which are based on the blockchain or coins that are held in existing wallets.

Before diving deeper, let’s take a look into what crypto airdrops actually are.

What is a Crypto Airdrop?

In simple terms, crypto airdrops are a promotional activity that is typically performed by blockchain-based startups. This is mainly aimed to help bootstrap a virtual currency project. So basically, using crypto airdrop is a method used by companies, via which one can earn free crypto from a crypto project and also helps in garnering a little marketing.

The main aim of the crypto airdrop process, is to spread a little awareness about the crypto project along with getting more people to trade in it when the coin gets lists on an exchange as an initial coin offering; often referred to as an ICO. There are many ways in which one can receive these tokens. Many times an airdrop is associated with free cryptos, but this is not always necessarily true. One should have to put in time and effort to gain them or they may have to deal with transaction fees. In order to qualify for the free gift of crypto tokens, the recipient may require the need to hold a minimum amount of the crypto coins in their wallet. Other than that, they may also need to cater to certain tasks as a requirement. These tasks may include things like posting about the token on a social media forum, sometimes it also may require connecting with a particular member of the blockchain project, or writing a blog post.

Fun Fact? It is also possible to be able to participate in an airdrop for free!

Types of Crypto Airdrops

With processes such as crypto airdrop existing to make the crypto space more engaging for the community members, we should also look into the different types of crypto airdrop that is present. Though an interesting thing to notice, the several different types of airdrops that we have, all of them have some unique characteristics to distinguish them from each other.

A lot of crypto projects very commonly use airdrops as a marketing strategy where they can venture onto to try and grow as a project through the crypto airdrop marketing strategy. Such as, some crypto projects may be looking for more brand awareness or new users, or they may simply want to reward the users who were first in line.

Benefits of Crypto Airdrops

With the extreme competition that exists among crypto startups, the crypto airdrop marketing strategy is an attempt for them to stand out in the crowd. Some of the businesses who are devoted to crypto airdrops often uses certain methods in order to fine-tune their airdrops. These methods include;

• alerting users
• provides listing services to startups,
• a range of different marketing services

Interestingly, crypto airdrops also holds the advantage of rewarding the loyal patrons of specific blockchain networks. Apart from that, sending airdrops to every wallet or the existing token holders vastly distributes tokens in such a manner that may not occur naturally in an open market.

Pros

• It rewards early adopters of a project or participants who are engaged with a project with a stake in it
• The process helps in spreading awareness of a crypto project as an airdrop is often a marketing strategy
• It motivates the use and adoption of a new token
• It can distribute tokens among holders in a way that would not have been possible in an open market

Cons

• It can have security threats if wallet holders somehow connects their wallets to suspicious sites in order to claim the airdrop
• It can be used to be a part of the “pump-and-dump” schemes
• May dissuade some investors from participating if they prefer different ways of distributing tokens
• They can turn out to be worthless if the token cannot have liquidity on an exchange

How to Find Crypto Airdrops & Prepare for Crypto Airdrops

Risks of Participating in Crypto Airdrops 

Though we have already gone through the cons of crypto airdrops, there remains certain risks to participating in these events. The whole process of crypto airdrops often seem harmless and safe, but this is not always the case. Scammers have also found methods to scam people through airdrops. They usually do that by taking away the individual’s crypto or private keys.

One thing to keep in mind is that any legitimate crypto airdrop will never seeks capital investment in the currency. The aim of crypto airdrop is absolutely promotional. With that being said, some crypto scams also involve sending micro amounts of bitcoin or any other crypto tokens to unsuspecting recipients. This is what is known as a dusting scam.

Conclusion

However interesting the process seems, it is not absolutely devoid of being scammed out of. To ensure that one does not become a victim of a scam, it can imperative that they do thorough research before getting onto the process. They can also so some research about the team behind the crypto project and make a note of what others think about it.

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