What are Crypto Airdrops? (animated explainer video)
A crypto airdrop occurs when a new crypto project offers cryptocurrency to new members for free or in return for completing a basic activity such as sharing a social media post. During the initial coin offering (ICO) mania in 2017 and 2018, this approach became widespread. Many cryptocurrency startups employed airdrops to advertise their initial coin offerings and generate interest in their new digital asset.
Governance tokens, in addition to standard money, are occasionally airdropped, allowing early adopters a greater voice in how a project develops in the future.
The draw for consumers is straightforward: crypto airdrops enable them to receive tokens without needing to purchase cryptocurrencies. The value to the firms is obvious: people who would otherwise be unaware of the initiative may become investors or, at the very least, contribute free publicity for the company.
What Are the Different Types of Airdrops?
Airdrops can take place in a variety of ways. The word is most commonly used to describe free tokens put into a user’s wallet in return for nothing more than an email address. However, that isn’t the only sort of cryptocurrency airdrop.
Typical Airdrop
This is the form of airdrop discussed before, in which users receive free tokens in exchange for signing up for a newsletter or something similar.
Bounty Airdrop
Bounty airdrops demand users to complete a basic activity to obtain the tokens. Retweeting anything about the project, making an Instagram post and tagging a few friends, or establishing a Telegram group are the most common ways to do so.
Exclusive Airdrops
This form of airdrop is only available to persons who have a long relationship with a certain project, website, or community. In September 2020, for example, Uniswap offered its loyal users 2500 UNI tokens. This was worth around $1,200 at the time, and there were no conditions.
Hard Fork Airdrop
This one is a little different from the others. A new currency is generated when a coin hard forks from its old blockchain and individuals who owned the original coin will get an equal quantity of the new tokens in their wallets. The Bitcoin Cash (BCH) hard fork in 2017 was the most well-known example of this: Bitcoin users who had BTC immediately got an equivalent amount of BCH.
Holder Airdrop
Users who already own specific tokens will receive new ones in these airdrops, which are analogous to hard forks. When a new project is launched on one of EOS’s or Ethereum’s blockchains, for example, users are occasionally given free tokens. These aren’t forks of the original coins, but rather completely new projects built on top of the EOS or Ethereum protocols.
All of these sorts of airdrops have one thing in common: fresh coins are distributed. #cryptodecoded