Beginners Guide to Crypto Airdrops
Airdrops are one of the best ways to generate interest for crypto projects and build engagement with the community. But what are they exactly?
If you’ve been active in the crypto space recently, you’ve likely heard or come across the term crypto airdrop before. Airdrops have been a buzzword on social media platforms and mentioned in newsletters, usually following the announcement of a new cryptocurrency project.
In this article, we’ll be discussing a general overview of crypto airdrops, their purposes, and how you can potentially participate one in the future.
What is a crypto airdrop?
Within the context of cryptocurrency, an airdrop is the practice of distributing coins or tokens to numerous wallet addresses for free, or in exchange for fulfilling a requirement.
This requirement usually comes in the form of a small promotional service such as following a designated social media channel, reposting content related to the airdrop campaign, tagging or inviting other users, or anything in between.
What is the purpose of a crypto airdrop?
Airdrops are often used as a marketing strategy to promote upcoming projects, strengthen brand awareness, or build momentum for a cryptocurrency project.
A genuine crypto airdrop is executed purely for promotional purposes, not for seeking capital gain or investment in the currency. And as we prefaced above, to qualify for the airdrop recipients are usually required to perform a small promotional service to support the crypto project hosting the airdrop.
Additionally, a crypto airdrop can also be used to reward loyalty for subscribing to a certain cryptocurrency or blockchain. In this case, the recipient may need to hold a certain minimum quantity of the crypto coin or token in their wallet to receive the airdrop.
Advantages of crypto airdrops
Generate awareness and interest
As we mentioned above, recipients of crypto airdrops are usually required to perform a task involving some type of promotional service – whether that be a social media share or sending invites to their network of connections, etc. This in turn generates awareness and interest for the crypto project hosting the airdrop.
Build engagement with the community
Following the promotional tasks performed by recipients of the airdrop, more and more people will eventually get exposed to the crypto project itself. Whether that’s a new cryptocurrency, a new blockchain, or an ongoing project – this exposure generates engagement and discussions among the community and audience.
A win for both parties
Crypto airdrops are a popular marketing strategy due to the exposure and interest it generates with their customers and audience. The benefit goes both ways, in that recipients also receive a sum of coins or tokens to their wallet in exchange for the task they complete to qualify for the crypto airdrop.
Crypto airdrops in 2021
Earlier this year on 17 May 2020, the Binance Smart Chain-based cryptocurrency money market Venus conducted a crypto airdrop to those who have held at least 0.01 XVS on the blockchain account, including those in pending trade orders. The reward for this is 1000 Venus reward tokens (VRT) for every XVS held.
Hydra is an entirely new blockchain that the developers of LockTrip have been developing. LockTrip (LOC) is currently powered by the Harmony blockchain as an HRC-20 token. The native Hydra cryptocurrency HYDRA was said to be distributed via an airdrop to all LOC holders over a span of 350 days this year in 2021.
Where to monitor upcoming airdrops
We have only shown you a couple of examples of past crypto airdrops in 2021. For a full list and details on the current hottest or the next highly-anticipated airdrops, we recommend visiting airdrops.io.
The site recommends that you “hodl” your airdrops as they undergo their volatile growth. It is true that airdrops are some of the less risky ways to try to “strike it rich” when the gifted free tokens happen to have high demand and value after all.
With that in mind, however, we do not recommend hunting for airdrops as a viable investment strategy. Think of it more like a game of lottery, using your spare cash to try to get lucky with an airdrop of your choice.
To summarize, crypto airdrops are effective marketing practices that provide promotional benefits and exposure to a crypto project and/or exchange, as well as benefits the recipients who are eligible to receive the coins or tokens during the airdrop.