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# CRYPTO 101

What Is A Crypto Airdrop & How To Earn Free Money

Crypto Airdrop

KEYTAKEAWAYS

  • Crypto airdrops distribute free tokens to promote new projects and attract attention.
  • Airdrops help build a community, increase token visibility, and attract early supporters.
  • Participating in airdrops can offer substantial rewards despite increasing complexity.

CONTENT

A crypto airdrop distributes free tokens to users meeting specific conditions or holding certain cryptocurrencies, promoting new projects and attracting attention.

 

WHAT IS CRYPTO AIRDROP?

 

As the name suggests, an airdrop implies something that “drops from the sky.” In practical terms, it refers to rewards given to users by a project team for one or more purposes, usually as part of a marketing strategy. The process involves directly sending tokens to eligible user accounts or allowing qualified users to claim the tokens themselves.

 

Crypto airdrops are essentially a marketing tactic used by project teams to attract public attention by distributing tokens to multiple wallet addresses, typically for free. These tokens are often given to individuals or supporters who show early interest in the project. For the project team, airdrop campaigns aim to increase visibility in the short term and attract more investment.

 

Additionally, the incentive of airdrop rewards can attract more users to help test the project. In the world of cryptocurrencies, airdrops create a symbiotic relationship between the project team and investors, fostering a seemingly thin but inseparable connection.

 

>>> More to read : The Airdrop Farmer’s Guide: What, Why and How


WHY CONDUCT A CRYPTO AIRDROP?

 

1. Marketing Tool

 

airdrops effectively promote new tokens in a crowded market. They attract attention and create a community around the token. High-profile projects like Tron and Bitcoin Cash have used airdrops to distribute tokens widely and increase visibility. This can lead to more interest and higher perceived value among recipients. Airdrops often require joining Telegram groups, following on Twitter, or providing email addresses, further boosting engagement.

 

2. Regulatory Evasion

 

Airdrops help navigate regulatory challenges by distributing tokens without a public sale, reducing the risk of being classified as securities. With increasing regulatory scrutiny, many projects now rely on private sales followed by airdrops. However, regulatory risks still exist, as seen with some projects canceling airdrops due to legal uncertainties. Airdrops are also used in hard forks to distribute new tokens to existing holders, like Bitcoin Cash in 2017.

 

TYPES OF CRYPTO AIRDROPS

 

Regarding the classification of crypto airdrops, they can generally be divided into two types:

 

1. On-Chain Airdrop Activities 

 

These involve higher participation difficulty, with unclear participation requirements and potential risks of assets being hacked or lost. However, participating in high-potential projects can offer substantial rewards.

 

2. Exchange Airdrop Activities 

 

These have very low participation difficulty, with exchanges clearly listing all participation requirements. The main risk is the potential collapse of the exchange. Participation opportunities are numerous, but the rewards are relatively modest.

 

There are various ways to participate in airdrops, with the most common being:

 

  • Early Donors: Those who donate funds to support the project’s development.
  • Early Testers: Those who assist in testing the product’s functionality.
  • Promotion Helpers: Individuals who actively participate in the project’s activities and share posts within the community to increase visibility.
  • Long-term Users: Users who consistently use the product or hold specific cryptocurrencies for an extended period.

 

>>> More to read : What is Arbitrum (ARB)?


HOW TO PARTICIPATE IN A CRYPTO AIRDROP?

 

Airdrops can be either pre-announced or completely unexpected. For surprise airdrops, tokens are randomly distributed to Ethereum or Bitcoin addresses. Pre-announced airdrops may have different prerequisites, making it impossible to provide a complete list of participation requirements for each airdrop.

 

However, you can prepare yourself to participate in airdrops effectively.

 

  1. Preparation for Participating in Airdrops

 

(1) An Active ERC20 Compatible Wallet

Most airdropped tokens are ERC20 tokens, so you will need an Ethereum wallet to participate. This wallet should also be active, as many airdrops conduct checks to prevent individuals from exploiting airdrop opportunities through multiple addresses.

 

(2) Telegram Account

 

Telegram is the de facto messaging app within the crypto community. Many airdrops require you to join their Telegram group to be eligible.

 

(3) Twitter Account

 

Twitter is another popular medium for ICOs. Therefore, many airdrops require potential participants to follow their Twitter account or even retweet their posts to participate.

 

These are just some of the basic tools required for participating in airdrops. Increasingly, airdrops are implementing stricter KYC requirements, almost similar to ICOs. While this may be a necessary precaution to navigate the uncertain regulatory environment, it might also reduce the popularity of airdrops.

 

  1. Where to Find Airdrop Information

 

With the growing popularity of airdrops, numerous airdrop aggregation sites have emerged, such as:

 

  • AirdropAlert
  • AirdropsMob
  • Coin Airdrops
  • Airdrop Addict
  • Airdrops.live

 

Additionally, there are many Twitter accounts and Telegram groups, both public and private, dedicated to airdrops. For those truly committed to earning cryptocurrency through airdrops, there are even paid subscription services available.

 

By staying informed and prepared, you can maximize your opportunities to participate in and benefit from crypto airdrops.

 

Airdrops have become an increasingly popular way for both crypto insiders and outsiders to gain substantial returns. Despite the growing complexity of airdrops over time, their rewards have not shown signs of diminishing. In the foreseeable future, there will still be many high-quality projects that can be participated in through airdrops.

 

FAQ

 

  • What is Airdrop ?

In the crypto world, an airdrop refers to a marketing campaign where project teams distribute free tokens to users who meet specific conditions or hold certain cryptocurrencies, to promote their project, product, or service.

 


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CoinRank is not a certified investment, legal, or tax advisor, nor is it a broker or dealer. All content, including opinions and analyses, is based on independent research and experiences of our team, intended for educational purposes only. It should not be considered as solicitation or recommendation for any investment decisions. We encourage you to conduct your own research prior to investing.

 

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