A Deep Analysis Of Crypto Airdrop
What is a Crypto Airdrop? Crypto airdrop is a kind of marketing strategy which was brought into existence by the crypto startups. It was done to enhance their project and the new token. The strategy involved the distribution of their native cryptocurrency to the existing users for free.
The users have been given a task to complete the simple promotional activities, that include following the social media account and sharing their posts of the given project.
While we are talking about the Crypto airdrop, let’s tell you that there are various types of airdrops. Each crypto project comes with its own requirements, however, most of the airdrops are having a similar goal. It is to spread awareness and an overall interest among the project. Some of them are done directly to the wallets of the users while the others need to be claimed manually.
In the meanwhile, an individual with a cryptocurrency wallet is able to receive or claim an airdrop. However, they have to be careful with scamsters. There are a lot of fraudulent airdrops that are having the potential to steal the funds from your wallet while claiming or transfering the free tokens.
You just have to confirm the legitimacy of the project before making a claim of an airdrop. You have to make sure when you have to connect your wallet to the airdrop website.
While the number of new coins has been growing, it becomes difficult for the crypto investors and traders to keep the record of all the new projects. Indeed, some of the crypto projects propose airdrops as a medium to stand unique and pitch for awareness. Everyone loves to have crypto for free but airdrops are not always legitimate. Let’s have a look at how Crypto Airdrop works and what can be done to be secured from the airdrop scams.
What is a crypto airdrop?
A crypto airdrop is said to be the transfer of digital assets from a crypto project to the various wallets. It aims to distribute coins or tokens to the current users in an order to increase awareness about the project. Although the tokens are distributed for free, some airdrops ask the users to perform some tasks before they claim. Crypto airdrops rose to the fame during the initial coin offering (ICO) boom in 2017. However, a lot of crypto projects are still using it as a marketing strategy.
How does crypto airdrops work?
There are various types of crypto airdrops. However, they usually include a small amount of cryptocurrency which is distributed to various wallets. It is usually distributed on the Ethereum network or BNB Smart Chain. Meanwhile, there are some projects that provide non-fungible tokens (NFTs) instead of the regular crypto.
Some projects don’t ask for anything and just initiate the distribution, while other projects usually need you to perform some tasks before claiming. The tasks include following the social media accounts, subscribing to the newsletter, or having some coins in your wallet. Besides, you are not always assured to have the airdropped tokens.
In some of the cases, the airdrops are distributed only to the wallets that interacted with the platform of the project before a certain deadline. For example, 1INCH and Uniswap used this method to assist the budding adopters. However, unlike common airdrops, those were expensive.
Why do crypto projects perform airdrops?
The blockchain projects provide free tokens in an order to gain a huge adoption and grow as a network. Several holders are often seen as a positive metric. It also makes the project even more decentralized in context of the ownership of token. The Crypto airdrops also motivate its users to use and boost the project. It can help garner a user base before the project shows the crypto exchanges.
Simultaneously, the airdrops are also likely to provide a false impression of growth, therefore, it is important to have a look at the other factors while evaluating the adoption. For example, there are hundreds of thousands of addresses that hold a certain amount of tokens. However, it is not being used by anyone. Therefore, the project is either referred to as a scam or fails to attract the community.
Are crypto airdrop and ICO the same?
A lot of people wonder if crypt airdrops or the ICO are the same. The questions seem natural considering the similar functioning of both the platforms. However, the Crypto airdrops and ICOs are different concepts, even though both of them include new cryptocurrency projects. Airdrops doesn’t require any kind of investment from the participants. On the other hand, an ICO is said to be a formula for crowdfunding.
In ICO, the project team announces a token sale in an order to cultivate funds from investors. It rose to fame in 2014, when the Ethereum network was performing a crowdfunding event in order to take care of its development. Later in 2017, the crypto space got to meet an ICO boom where hundreds of new projects were adopting the method.
What are the types of airdrops?
Notably, there are a lot of ways to carry a cryptocurrency airdrop. Excluding the standard airdrop that only transfers crypto to specific wallets, there are other types as well. Some of the examples are bounty, exclusive, and holder airdrops.
It asks its users to complete some tasks that include sharing a post about the project on Twitter and joining the official Telegram account of the project besides creating a post and tagging some of their friends on Instagram. In order to claim a bounty airdrop, you may be asked to fill out a form that requires your wallet address and you also have to prove that you have completed the given tasks.
It only sends crypto to specific wallets. Usually, the users with an established history with the project, get to do it.
It provides free tokens to those having some amount of digital currencies in their wallet.It is pertinent to mention that several new projects airdrop tokens to the blockchain-based bitcoin (BTC), ether (ETH), or BSC wallet holders. It is because they have the largest communities in space.
How to claim an airdrop?
While claiming an airdrop, the process may vary on the project-to-project basis. Notably, you would need a cryptocurrency wallet to claim an airdrop is a cryptocurrency wallet. It is pertinent to mention that MetaMask is a prominent and feasible way to use crypto wallet. Later, you would be allowed to check if your wallet has received the free tokens or not. In case you don’t receive the token, you may have to interact with a website to claim the airdrop.
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