Cryptocurrency airdrops are used by various blockchain projects for distributing free coins to a wide audience directly to their wallets.

Particularly often it happens at an early stage of a project with a launch of a brand new cryptocurrency. This helps the team to attract new users and establish a rapport with them by giving them a load of free crypto. Besides, it helps to foster community engagement. Giving away free coins to a community helps to create buzz around the new project and catches the attention of potential new users, thus greatly expanding the future user base. This usually works pretty well since people love receiving crypto free of charge. That also explains why so many people regularly fall for cryptocurrency scams too, though.

Once an airdrop raises interest of the community, it may result in a bigger activity on social media, word-of-mouth promotion and it also increases the overall visibility of the project.

Here’s how airdrops usually take place

Airdrops typically kick off when the project’s team makes an announcement to the community, communicating to them the details and the criteria which will make users eligible for taking part. The team as a rule uses a variety of channels, such as the official website, social media accounts and often they also publish this information via various cryptocurrency news outlets and blogs.

As for eligibility criteria, those usually vary depending on the goals the team chases organizing the airdrop. As a rule, those criteria include having a particular blockchain wallet, mandatory signing up for the crypto project’s newsletter, joining them on Telegram and other social media, such as X, Reddit, etc. Those can also include sharing the project’s content and spreading the information about the project via referral programs.

Often enough, airdrops are made for holders of particular cryptocurrencies, e.g. Ethereum, since a lot of new cryptos are built on top of this blockchain. For this purpose, a snapshot of wallets within the community containing ETH is taken on data that gets announced in advance. When the snapshot is done, the recipients of the airdrop are identified and the coins are distributed to their wallets. Sometimes, users can be required to claim their airdrops manually. This can be done to prevent coins going to unused (inactive) addresses.

Types of airdrops

There can be several types of crypto airdrops and each of them has its own set of goals and requirements.

A standard airdrop is for those who are interested in receiving free coins only to express their interest in the project and free crypto. To be eligible for this, one needs to provide a valid wallet address as a rule.

Bounty airdrops happen when users are tasked with particular things to do in order to receive free crypto to their wallets. These tasks they have to do are usually about raising awareness of a blockchain project using various channels – social media, personal ones, etc.

In order to take part in holder airdrops, participants are required to have a certain amount of the existing coins in their wallets. The required amount may depend on how long a potential participant holds them and how many coins are necessary to be held. There are also exclusive airdrops when to become a participant one needs to be picked by the project team to qualify for those. They may choose participants based on various criteria, including their influence on the community, reputation, contribution, etc.

Risks to do with airdrops

Airdrops can also help to solve such an important issue as helping to decentralize token distribution. Unless tokens are given away to a wide audience, projects’ token ownership is likely to be concentrated in the hands of several individuals related to those projects or concentrated within their teams or in the hands of certain entities. Therefore, airdrops are a great tool for raising a project’s credibility in the eyes of the community and they help to make the project’s network much more decentralized. That is frequently one of the major goals for new crypto startups.

Still, aside from benefits, the crypto community also faces inevitable risks associated with free giveaways and users should always be aware of them. These risks include potential scams and phishing attacks when scammers create fake airdrop campaigns to steal private keys from users’ wallets. There are also so-called dusting attacks. When these happen, scammers send small amounts of crypto to multiple wallets in order to clarify users’ identities and link wallets to particular users. It is worth avoiding accepting unknown tokens into one’s wallet.

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