Crypto Coins are at the verge of random increase day by day, so to manage them is becoming harder day by day for crypto investors and traders for keeping track of every new project. Where, some of the crypto projects offer airdrops as means of enhancing awareness and standing out. As it’s the scenario that free crypto is liked by every trader, airdrops aren’t always legit. To have a more clear picture of Airdrop, let’s get into its detail.
About Crypto Airdrop
Crypto Airdrop tends to transfer digital assets from crypto project to multiple wallets. The basic idea is of distribution of coins or tokens to present and capable users, so as to increase awareness of the project. Basically the tokens are given for free, but certain airdrops demand from users, for performing particular tasks before claiming the same. They had gained popularity during initial coin offering (ICO) boom of 2017, but by various crypto projects, they are still used as marketing strategy till date.
Working Of Crypto Airdrops
Crypto Airdrops have wide variety, still they hold in small quantities, cryptocurrency being distributed to various wallets (more often of Binance Smart Chain or Ethereum). Where there are projects which are responsible for waving NFTs despite of daily crypto. Few of the crypto projects would conduct distribution without even asking anything, where others are going to ask for performing particular tasks which often involve following of social media accounts, subscribing to newsletter, or holding a minimum value of coins in holders wallet, but they are not guaranteed always of attaining the airdrop tokens. In few of the cases, airdrops are provided to wallets only which interact with project’s base before particular date. Uniswap and 1INCH are famous examples which use this method for supporting early adopters. But not as common airdrops, they were holding value of thousands of dollars.
Reasons Behind Crypto Projects Performing Airdrops
With the above discussion, it’s clear that the blockchain projects give away free tokens so as to have wider adoption and growth of their network. Large number of its holders are very often found as positive metric, thereby making the project very much decentralised by means of token ownership. They also tend to motivate its receivers of using and promotion of project. This would help in bringing forth an initial user base, even before listing of project on the crypto exchanges. In case of evaluation of adoption, other factors need to be taken care off. For instance, in case hundreds of thousands of addresses hold certain token, but neither of the holders are in fact using the same, then the project could be a scam or might have failed to attract the community.
Analysing The Difference Between Airdrop And ICO
Crypto Airdrops and ICOs are both different from each other, apart from the fact that they both include new cryptocurrency projects. Where airdrops need not require any sort of investments from its participants, ICO on the other hand is crowdfunding procedure. Another point of differentiation is that in an ICO, project team renders a token sale so as to collect funds from its investors. Where popularity of ICOs begun in 2014, when crowdfunding event was performed by Ethereum, so as to support its development. In 2017, the crypto world had ICO boom, holding various projects adopting method as well.
Varieties Of Airdrop
As a standard airdrop just transfers crypto to various wallets, there are various other types for them as well.
- Bounty Airdrop: Users have to finish particular tasks as sharing a post concerning a project on Twitter, joining the official Telegram of the project, creation of a post and tagging of some friends on Instagram. For claiming the bounty airdrop, one would have to fill the form with their wallet address and give proof of accomplishing the tasks.
- Exclusive Airdrop: Such an airdrop likely sends crypto to assigned wallets, where the recipients have an established history with the project as an active community member or even acceptor of the project. For example, in September 2020, the decentralised exchange (DEX) Uniswap had airdropped 400 UNI to each wallet which had connected with its protocol before a set date. Where, the governance token, provides its holders with the right of voting on decisions concerning project’s development in near future.
- Holder Airdrop: Such an airdrop helps in distribution of free tokens to certain holders who are holding particular amount of digital currencies in their wallet. Where the project team takes snapshot of users of crypto holdings on certain date and time. In case the wallet balance meets minimum requirement, then the recipients could claim free tokens as per their holdings during the snapshot timings.
Ways Of Claiming An Airdrop
- The process of Airdrop might be different according to project and the basic thing which one requires for claiming an airdrop is cryptocurrency wallet.
- Popular and easily used crypto wallet is MetaMask.
- Immediately after the use of crypto wallet, one could find wether their wallet received free tokens.
- In case the holder has not received free tokens then interaction with website is essential for claiming the airdrop.
Methods Of Avoiding Airdrop Scams
As it’s a tougher decision of claiming an airdrop as scam. Therefore, one should always DYOR before signing up for any sort of airdrop, in specific to situations when one is required to connect with their wallet to particular website. In few cases, scammers would airdrop the tokens in various wallets, but in cases where transferring of of such tokens is required to be done in a crypto exchange or in another wallet, then wallet would be drained out of the holder.
Whereas in few other cases, scammers would go for announcing a fake airdrop which leads to a phishing website. Connection of wallet with website would be done by them which would look very much same as the original one. The time you connect with your wallet and sign a transaction, other tokens would be taken out of your wallet. Basically, this happens frequently with fake Twitter and Telegram accounts which look very much same as the official accounts.
Few other airdrop scams involve saying to send crypto an unknown wallet address so as to unlock one’s free tokens in return. Where legal airdrops would never inquire for your funds. One should become more careful with airdrop emails or direct messages.
So as to avoid scamming, one should be assured of getting in project’s official website and social media channels. The official links should be bookmarked and double checked to be assured of them, conducting an airdrop event. In case the holder is having no knowledge about the project, holder should undergo extra research for finding out what crypto community is saying. In case enough information is not gained by researching then holder should probably ignore the airdrop.
Last but not the least, in cases of extra protection, you could ending up setting up a new wallet and new email address are dedicated towards receiving airdrops only. This assures that funds in one’s personal wallet are safe from the airdrop concerned phishing attempts. Also be careful of not sharing private keys with anyone, to be on a safer side.
Crypto projects could gain attraction in crypto world cause of crypto airdrops. There is a golden chance as well for the crypto enthusiasts for growing up their portfolio with upcoming airdrop tokens.
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