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Companies give free tokens or coins to promote their cryptocurrency. It is used to promote a new project, reward loyal users, or incentivize participation in a particular blockchain ecosystem.
What is an Airdrop?
An “airdrop” inside the cryptocurrency global refers back to the practice of dispensing free tokens or cryptocurrencies to a delegated group, regularly as part of a promotional or community-building strategy. These airdrops may have exceptional purposes, consisting of profitable existing token holders, attracting new users, or increasing the attention of an undertaking. To participate, recipients commonly want to satisfy specific criteria, and they have to comply with supplied commands to say the airdropped tokens.
Key points about crypto airdrops:
1. Types of Crypto Airdrops:
Standard Airdrop: Users receive tokens by simply signing up for an account.
Bounty Airdrop: Users complete promotional tasks such as following social media accounts, subscribing to newsletters, or interacting with a project’s content.
Holder Airdrop: Users who already hold a certain amount of tokens are rewarded.
Hard Fork Airdrop: This occurs when a blockchain protocol splits, and new coins are airdropped to existing token holders.
Exclusive Airdrop: Rewards users based on their level of engagement with the project rather than their wallet size.
Raffle Airdrop: Winners are selected randomly from those participating in the airdrop campaign.
2. How Crypto Airdrops Work:
- Projects launch a public campaign to promote the airdrop through social media, forums, and other platforms.
- Companies collect wallet addresses and additional information from potential token recipients.
- A smart contract is used to automate the distribution of tokens to selected participants.
- Transaction block results are often published to verify the airdrop’s execution.
3. Purposе of Crypto Airdrops:
– Airdrops aim to grow a projеct’s usеr basе, gеnеratе еxcitеmеnt, and incеntivizе usеrs to lеarn morе about thе projеct.
– They can target early supporters, existing community members, or users of competing platforms.
– The goal is to provide long-term value to airdrop recipients and encourage them to contribute to the project.
Notable Crypto Airdrops:
– Bitcoin Cash: Distributed a hard fork airdrop in 2017, giving users 1 Bitcoin Cash (BCH) for each Bitcoin (BTC) owned.
– Stellar: Airdropped $125 million worth of Stellar lumens (XLM) to Blockchain Wallet users in 2018.- Uniswap: Airdropped Uniswap tokens (UNI) to over 250,000 early users in 2020.
#Glossary [Source: Coinpedia]