What is a crypto airdrop? Are they good? Are they fraudulent? The answers to all these questions - and more - are in this article.
In the world of cryptocurrencies, companies often conduct airdrops to promote their own company or crypto assets. Airdrops are a marketing strategy used to bootstrap virtual currency projects. This way, they can reach a wider audience. The company also can reward early community members for their loyalty.
Airdrops are available to the public and have become quite popular over the last several years. However, there are risks that one should be aware of - in addition to the rewards.
A crypto airdrop is a marketing strategy that is often used by blockchain projects or companies. This involves giving out free tokens as a reward to help the broader promotional initiative. The company gives a reward as a direct deposit into your crypto wallet. To join an airdrop, you must hold the least quantity of a certain asset, such as an NFT, or transact on a crypto platform.
The crypto company creates this campaign to increase awareness about the company, and its product, or promote broader adoption of their token. The strategy is based on guerilla marketing, which involves a lot of participants in promotional activity.
The main idea is to send minted tokens to hundreds or thousands of different wallets. The hope is that recipients will be more inclined to engage with the project. This concept is like finding a free discount card in your mailbox to encourage you to visit a new store in your neighbourhood. But, a crypto airdrop is not about making you spend money but rather invites you to help raise awareness for their crypto projects.
In most cases, the company issues crypto airdrops to users in exchange for completing a certain task in promotional activity. These tasks often involve things such as:
Following a social media account (such as a crypto company)
Sharing or retweeting one of their posts or tweets, including using their hashtags
Sending or receiving a transaction (using a particular crypto platform or wallet)
Signing up, creating a new account, and agreeing to receive updates
There are several types of crypto airdrops that you must understand before participating.
Standard Airdrop
This airdrop is popular due to its simplicity. You just simply express your interest to receive the airdrop. You must provide a valid wallet address, and some airdrops need no more information beyond this. Standard airdrops often have a set amount of tokens to distribute with a limit on how many tokens each participant may receive.
Bounty Airdrop
Bounty crypto airdrops occur when you have to perform certain tasks. As a reward for performing tasks, you often receive points that correspond to how large of a bounty airdrop you receive. But, you may have to earn a certain amount of points before qualifying for the airdrop. There may also be referral bonuses if you can recruit other users to join.
Holder Airdrop
In this airdrop, the token is distributed based on the number of tokens held by individuals. Everyone on the blockchain can see the wallets and token distribution. Holder airdrops focus on larger, more invested individuals to receive the benefits. In some cases, holder airdrops may need the least token holding to be eligible for the full airdrop. Meanwhile, others may distribute tokens based on the proportion of an individual's amount held.
Exclusive Airdrop
In an exclusive crypto airdrop, the company will select specific people for the airdrop. The company selects individuals based on several factors. It can be based on the number of tokens they have, time spent on a project, most money spent on the non-token activity, or the number of posts in a forum.
Raffle Airdrop
This airdrop allows you to win a prize or reward through a random selection process, like a traditional raffle. Often, a project will state the number of airdrops they intend to give and encourage you to earn a raffle ticket. You can earn this ticket by holding tokens, earning points, or expressing interest. The company uses this as a marketing strategy to increase awareness, engagement, and participation.
Crypto airdrop rewards
By participating in airdrop, you can get many benefits such as:
Passive Income
As a participant, you can earn passive income from joining a crypto airdrop. If you join one, you become the holder of the airdrop tokens. When the project succeeds, the token’s value usually will go up. So you can earn significant profit by holding an airdropped token.
Lending
If you are already familiar with the crypto world, you can use the token in more advanced ways. You can use it for yield farming and lending. This way you can use the token to gain a bigger profit.
Various Rewards
Another advantage is that you can receive different kinds of rewards depending on the platform. For instance, if you hold a governance token, you can take part in Decentralized Autonomous Organization (DAO) voting.
Here is some advice for you before participating in a crypto airdrop while minimizing the risk of getting scammed:
Stay updated on crypto news
Read the news frequently to stay informed about upcoming airdrops. You also can join the online crypto community. Oftentimes, community member shares their experience and provide valuable information. This way you can more aware of any potential scam warnings. Some best sites to look for airdrops include CoinMarketCap, Airdrops.io, Airdrop Alert, Airdrop King, and AirdropBob.
Choose credible platforms
Take part in airdrops through well-known platforms that have a history of hosting legitimate projects. These platforms often conduct due diligence and verify the authenticity of the projects they list.
Use trustworthy wallets
Store your crypto assets and funds in wallets that have a proven security track record. Beware of newly created or unknown wallets. They might be created by scammers to steal your funds.
Enable two-factor authentication
Protect your crypto wallets and accounts by enabling two-factor authentication when possible. This will add an extra layer of protection and helps prevent fraudulent access.
Despite potential gains on the airdrop, there are several risks that you must be aware of before joining one. Here are the risks that you should consider:
Scammers
The biggest risk of crypto airdrop is that you can become a scam victim. In some cases, scammers ask for your personal information or access to steal your funds. So, you must do your research first before connecting your crypto wallet and providing sensitive information. It is safer to join airdrops from a well-established project for the first time.
Time-Consuming
Airdrop may need you to do a big amount of tasks that need a lot of time. Make sure that the potential profit is bigger than the time you spent on the tasks.
Beware of restrictions
Make sure you read and understand the terms and conditions of the airdrop before participating. You should be aware of any restrictions that can harm the process of receiving rewards.
Participating in crypto airdrops can be rewarding for you and the projects. You can receive many rewards and profits. On the other side, the projects can attract bigger attention, increase awareness, and build a loyal user base. Successful airdrops have a significant impact on the growth of some of the most popular projects in the crypto world. This includes Bitcoin and Ethereum.
But, it is important to do research and check the trustworthiness of airdrops before participating. You should be aware of many scammers and fraudulent projects. Regardless, with the proper precautions and knowledge, you can benefit from participating in airdrops while supporting and contributing to the growth of the crypto community.
At the moment, WALBI doesn’t have any plans to create a token or have an airdrop - although that may come in the future. For now though, if WALBI clients want to earn rewards, we have a solution for you.
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