If you have been involved in cryptocurrencies for a while, you might have heard the phrase ‘airdrops”. But individuals reading this concept of “crypto airdrops” for the first time might ask what it is. While airdrops are normally used to deliver essential supplies to areas that have been affected by wars and natural disasters, crypto airdrops are a bit different. In layman terms, an airdrop means awarding a certain number of free coins or tokens to the crypto community free of charge. It is kind of a giveaway.
Generally, to be a recipient of an airdrop you need to have some relevant coins stored in your wallet. For example, if the company doing the airdrop is based on Litecoin, you need to have some LTC in your wallet. If it is based on Ripple or Ether, you need to own some XRP or ETH. Tokens offered free of charge by companies are usually considered to be rewards
Why are Airdrops Conducted?
The idea of giving away free coins is part of a marketing strategy. Most coin creators
and blockchain-based startups choose to run airdrops for a number of reasons.
Airdrops are always a win-win for both the project owners and the crypto community. Companies offering free tokens attract a large number of participants to their project and get more social media followers. Participants, in turn, get a reward for social media likes, comments, shares, and referrals. It’s a tried and tested business model which typically works out pretty well.
Communities matter a lot when we talk about cryptocurrencies or ICOs. And giving away free coins is one of the best strategies for building a bigger community.
Blockchain-based startups get more benefits of conducting a crypto airdrop. Here are three major benefits:
1. Free marketing: A new ICO typically has to spend a fortune on marketing their projects. They need to spend thousands of dollars on paid listings, paid posts and paid advertisements. With airdrops, they can reduce their marketing expenses as news about airdrops spread very fast. It attracts people toward their project which in turn help them get more investors during their Initial Coin Offering sale.
2. Online attention: With dozens of crypto-based projects coming every month, it’s becoming hard for new projects to get attention. Airdrops help them garner attention as they get covered by many social networking sites, websites, YouTube channels, etc. Giving someone free money is a great way to get his/her attention. It could spur adoption of a new coin better than an ICO.
3. Drive up the price of an existing coin: If a new digital coin is conducting an airdrop, volumes will rise significantly as investors jump to take advantage of the airdrop. The demand for the coin could go up as people buy it just to be part of the future airdrop. As a result, this will increase the value of the currency in the short run. The airdrop will also boost public awareness about this coin and push up volumes in the long-run.
How Much Can I Earn From Airdrops
Not all airdrops will make you a millionaire overnight but you can earn up to $10,000 (if you get lucky). While most tokens will be worth nothing, there will be some that can make you feel rich. For instance, on January 2018, users who signed up for free Ontology (ONT) Email Newsletter were awarded 1000 ONT tokens. Back then, the value of ONT tokens was completely nothing. In June 2018, a single ONT is worth $8.50. So participants in that Airdrop now own ONT coins worth more than $8, 000.
Note: KYC for receiving the 1,000 ONT community reward will be sent from [email protected] only. We will notify users on our social media channels when the KYC email has been sent out. Our only website is https://t.co/0MmwpM0iDH. Please be careful and be aware of scams.
— Ontology #BUIDL4Web3 (@OntologyNetwork) January 18, 2018
How can I find Airdrop information?
Information about Airdrops can be found in places like BitcoinTalk.org, Reddit, Facebook groups. There are also sites like Airdropalert, ICOdrops, and Airdropaddict that alert people to the advent of an airdrop.