Cryptocurrency airdrops are a hot topic in the crypto world. But unlike the unsolicited surprises you might think of from a decade ago, these airdrops are all about marketing and community building in the fintech space.
When a new cryptocurrency project launches, developers often distribute free tokens to users as a way to generate buzz and attract attention.
It’s like a digital giveaway, designed to boost platform awareness and get people excited about what’s coming next.
If you have been wondering what cryptocurrency airdrops are, this post will show you all you need to know. Just keep reading!
What is a Cryptocurrency Airdrop?
Let’s get straight to it! A cryptocurrency airdrop is a promotional tactic used by blockchain projects to distribute free tokens directly into users’ crypto wallets. It’s a way for new or existing projects to increase visibility and attract attention.
By offering these tokens for free, companies hope to build a buzz around their platform and encourage users to engage with their ecosystem.
Essentially, it’s a blend of blockchain technology and marketing rolled into one strategy. These campaigns are often aimed at getting early adopters excited about a new project or rewarding loyal community members.
For example, some startups target users who have interacted with similar platforms in the past, encouraging them to switch or try out the new service.
Others, like the Ethereum Name Service (ENS), have used airdrops as a way to reward long-term users, giving tokens based on factors such as how long someone has held a domain. This helps strengthen community ties and promotes loyalty.
While airdrops can generate a lot of excitement, they don’t always guarantee success. Take the case of NFT marketplace LooksRare, which airdropped tokens to OpenSea users.
While it initially drew attention, issues arose when the founding team cashed out a significant amount of the token’s value, raising concerns among investors.
Such situations show that while airdrops can be powerful tools for engagement, they also come with risks and challenges that both projects and users should be aware of.
Types of Crypto Airdrops
Crypto projects use various token distribution methods depending on their goals, from building a community to promoting a new product.
Here’s a quick look at the different types of airdrops used in blockchain promotions:
Standard Airdrop
In a standard airdrop, users receive tokens simply for signing up, without any extra tasks. It’s a straightforward way to engage new users quickly.
However, these are often limited, so it’s first-come, first-serve. For example, RabbitX, a decentralized exchange, has used this method to welcome new users with crypto rewards.
Bounty Airdrop
Bounty airdrops require users to complete specific actions, like following social media accounts or joining a newsletter.
In return, they receive tokens as rewards. This approach drives engagement and builds awareness for the project.
Holder Airdrop
Holder airdrops reward users who already own a certain amount of tokens at the time of the snapshot. It’s a way to reward loyal users or those who hold specific assets.
Platforms like Sudoswap plan to use this method for their upcoming governance token, rewarding holders of their NFTs or related tokens.
Hard Fork Airdrop
When a blockchain network splits into two, or hard forks, airdrops are often used to distribute the new tokens.
Users holding the original tokens receive the new ones automatically. An example is the ETHPoW airdrop, which rewarded Ethereum users when the network transitioned to a proof-of-stake system.
Exclusive Airdrop
Exclusive airdrops target loyal or engaged users, not just those with large wallets. These airdrops consider time spent on the platform, engagement levels, or specific actions taken.
Raffle Airdrop
When the demand for an airdrop is high, some projects use a raffle system to distribute tokens randomly. This method ensures fairness when the number of participants exceeds the available rewards.
Notable Crypto Airdrops
Crypto airdrops have come a long way since the first major one by Auroracoin in 2014. Some of the biggest names in the crypto world have used this strategy to build awareness and reward their communities.
Here are a few standout examples:
Bitcoin Cash (BCH)
In August 2017, Bitcoin Cash distributed a hard fork airdrop when it branched off from the original Bitcoin network.
It guaranteed users 1 BCH for every Bitcoin (BTC) they held. This airdrop marked a significant moment in the crypto world, with BCH reaching a peak value of over $4,300 in December 2017.
Stellar (XLM)
Stellar made headlines in November 2018 when it partnered with Blockchain.com for one of the largest airdrops ever.
The project distributed $125 million worth of Stellar lumens (XLM) to Blockchain Wallet users. The aim was to encourage people to explore and use Blockchain’s new airdrop program, boosting wallet activity and adoption of XLM.
Uniswap (UNI)
In September 2020, Uniswap rewarded its early adopters with a generous airdrop of UNI tokens. Users who had made at least one transaction on the platform before that date received 400 UNI tokens each.
The value of UNI surged by 160% within two days of the airdrop, drawing significant attention and highlighting the power of crypto airdrops to boost engagement and platform loyalty.
What Was the First Crypto Airdrop?
The first-ever cryptocurrency airdrop is credited to Auroracoin (AUR) on March 25, 2014. It was designed as Iceland’s national cryptocurrency, aiming to provide every citizen or permanent resident with a share.
Those who submitted their national ID received 31.8 AUR. This initiative marked the beginning of crypto airdrops as a strategy to boost engagement and adoption within a community.
How Do You Find Cryptocurrency Airdrops?
Let’s round up this post with this – how to find crypto airdrops.
Well, finding cryptocurrency airdrops is all about staying connected. These events are typically promoted to generate excitement and awareness around a new token.
To stay in the loop, you can subscribe to airdrop newsletters, which often share upcoming opportunities and details.
You can also follow blockchain projects and crypto influencers on social media platforms. This can help you spot airdrops early. That way, you won’t be missing out on potential crypto rewards.