Consumers find it difficult to refuse freebies, especially cryptocurrency. Even crypto skeptics are unlikely to say “no” to some free Bitcoin (BTC) or Ethereum (ETH)ptics are unlikely to say “no” to some free Bitcoin (BTC) or Ethereum (ETH). Interestingly, many new Web3 projects take advantage of the attractiveness of free tokens by providing “crypto airdrops” to consumers who have previously used their goods or may be eager to utilize them.
Bitcoin airdrops can be a valid way to acquire free cryptocurrency, but you must exercise extreme caution. Make sure you completely grasp what a crypto airdrop is and how to tell the difference between legitimate initiatives and frauds. Continue reading to find out.
What Exactly Is a Cryptocurrency Airdrop?
Crypto airdrops include distributing money or tokens to wallet addresses. Little quantities of the new virtual currency are transferred to the wallets of active blockchain community members for free or in exchange for a minor service, such as retweeting a message issued by the firm creating the currency. A crypto airdrop’s ultimate purpose is to raise awareness and circulation of a new token or currency.
KEY LESSONS
- A crypto airdrop is a marketing strategy used by cryptocurrency entrepreneurs.
- It entails providing tokens to existing cryptocurrency traders’ wallets for free or in exchange for a minor promotional service.
- The airdrop is intended to raise awareness and ownership of the cryptocurrency startup.
- While some airdrops are real, some have been identified as fake while attempting to steal a wallet or personal information.
- Airdrops may be based on people who indicate interest, possess current tokens, are deliberately chosen, or win lotteries.
Everything You Need to Know About Bitcoin Airdrops
A crypto airdrop is a promotional activity that blockchain-based companies frequently carry out to aid in the development of a virtual currency venture. Its purpose is to increase public knowledge of the cryptocurrency project and encourage more people to trade in it when it starts as an initial coin offering (ICO) on an exchange.
Generally, airdrops are marketed on the company’s website, social media, and cryptocurrency forums. Only coins or tokens kept in current wallets or unique wallets based on the blockchain network are given.
To be eligible for the free gift, a recipient may need to have a certain number of cryptocurrencies in their wallet. Instead, users may be required to do a specific activity, such as discussing the currency on a social media platform, interacting with a certain member of the blockchain project, or publishing a blog post.
Types Of Crypto Airdrops
While crypto airdrops are generally free, there are always some conditions associated with claiming them. Depending on the type of airdrop being offered, you may be eligible to receive a crypto airdrop. The four forms of crypto airdrops are as follows:
Standard airdrops
A typical crypto airdrop occurs when a Web3 initiative solicits interested participants online. In some circumstances, all you have to do is provide the team with information such as your public crypto wallet address and wait for your reward.
Because this airdrop is so simple to claim, it garners a lot of attention and buzz. Nevertheless, these airdrops are most likely crypto frauds, so new users must conduct thorough research before disclosing any personal information.
Retroactive airdrops
Retroactive airdrops reward wallet addresses that have previously used a certain dApp. Normally, projects will take a “snapshot” of the blockchain at various intervals to identify who is eligible for these prizes.
Because the conditions for these airdrops are published after the fact, you must hope that the dApp you’re utilising rewards early and devoted followers.
Bounty airdrops
You never have to pay for a crypto airdrop, but you may have to work for it at times. To be eligible for free tokens in the case of bounty airdrops, you must complete a number of activities. People are frequently required to promote a new crypto project on social media in order to be eligible for a reward airdrop.
Holder airdrops
The holder crypto airdrop rewards people who previously owned (or still own) a specific crypto asset.To select which wallets will get the airdrop, projects often take a snapshot of the blockchain at a certain time.
Everybody who had Bitcoin before August 2017 should have gotten free Bitcoin Cash in their crypto wallets. The developers who left Bitcoin to build Bitcoin Cash anticipated that this airdrop would entice early cryptocurrency users to switch to their platform.
Procedure for a Crypto Airdrop
The crypto airdrop process begins when a project or corporation determines that an airdrop is required. This might be in reaction to market tactics, a network hard fork, or to entice current investors. The first stage is to decide how the airdrop will be carried out and who will be eligible.
The public push for broad, universal airdrops is the next phase. This includes gathering information for interested parties; often, this is confined to wallet addresses, but businesses may also obtain e-mail addresses to expand their contact list.
Different sorts of airdrops may rely on a snapshot, which is a capture of an instance that determines who meets specific requirements. For example, the project may take a snapshot to identify all addresses that have at least 1,000 tokens as of December 31st at midnight. Any transactions that occur after the snapshot will have no effect on the results of the airdrop; hence, coin or token values frequently fluctuate in reaction to when snapshots are taken.
After the list of airdrop receivers has been determined, the airdrop is frequently facilitated by the use of smart contracts. The corporation may decide to use its Treasury wallet to effectuate the airdrop, and the transaction block is frequently publicized to demonstrate the equitability of the airdrop. The airdrop will be shown leaving the company’s wallet and being distributed to the recipients in the transaction.
Airdrop recipients may receive cash or tokens without having to accept the tokens. Some people may need to add the token or currency, as well as its address, to their wallet in order to see the token’s balance.
Keeping cautious when looking for crypto airdrops
People will make a fortune from a few crypto airdrops. Although there have been a few lucrative airdrops in the past, many of these tokens are now worthless. In the worst-case scenario, a crypto airdrop might jeopardize your assets and identity.
Scammers exploit crypto airdrops in a variety of ways to entice naive retail investors. Developers can use an airdrop to drain your funds or lead you to a phishing attack when dealing with unknown projects.
Airdrops may also be used to determine who owns a cryptocurrency wallet. A “dusting attack,” for example, is a well-known tactic that involves transferring small amounts of cryptocurrency to a large number of wallets. This crypto dust can help the sender determine who is behind a crypto wallet address.
Worldcoin is presently working on solutions to several security vulnerabilities associated with crypto airdrops. For example, we aim to develop a wallet verification system that can determine which crypto wallets belong to certain individuals while respecting their privacy.
Meanwhile, anyone interested in crypto airdrops should proceed with care while examining these offers. Remember to conduct extensive research on credible sources such as CoinMarketCap for crypto projects that give airdrops.
It’s also a good idea to have a separate crypto airdrop wallet. In other words, construct a separate private crypto wallet for currency airdrops. As a result, if this wallet is hacked, you will not lose all of your digital valuables.
Scams using cryptocurrency airdrops
A genuine crypto airdrop will never solicit financial investment in the currency. Its sole purpose is promotional. Other crypto scams, on the other hand, involve transferring small quantities of bitcoin or other cryptocurrencies to unwary receivers in what is known as a “dusting scam.”
Several airdrop scams focus on convincing an investor to connect their wallet to a phishing website in order to get their airdrop. The web3 URL will frequently urge a user to link their wallet, utilising well-known and popular wallet services like MetaMask, Trust Wallet, or Oasis. The fraud is complete after a person links their wallet by supplying their secret password or keys.
Airdrop scams can also occur by luring market participants to invest in a certain security in the hopes of receiving a different item through airdrop. For example, a project may promise that storing specific NFTs in a wallet will result in owners receiving a rare airdrop. Despite the fact that the airdrop may be real, the project owners may have attracted NFT market activity in order to sell theirs at a greater price.
Avoiding Airdrop Scams
Users should always be wary of unsolicited deposits into their cryptocurrency wallets. Furthermore, consumers should be informed of the projects in which they are investing or seeking to claim assets. “Do your own research,” as the saying goes among bitcoin explorers.
It is recommended that crypto enthusiasts avoid connecting to websites they are unfamiliar with. This includes ensuring that any external links users click on are from the project. Try bookmarking commonly visited sites to guarantee you’re constantly connected to the correct site.
Businesses frequently publicise airdrops and other promotions. Follow the project on social media, forums, or Discord to stay up to date on planned activities, but keep in mind that intricate frauds may copy or imitate project social media identities.
If you don’t want airdrops to be connected with your principal investments, try opening a separate wallet for airdrops. After getting the tokens, you can move them between multiple wallets. Despite not being a typical type of diversification, holding cryptocurrency in various wallets spreads and reduces total risk.
Pros & Cons Of Crypto AirDrops
Pros
- Early adopters or those involved in a project with a stake in the project are rewarded through crypto airdrops.
- Because of the marketing component of an airdrop, it raises awareness of a project.
- encourages people to utilise and adopt a freshly issued token.
- Tokens may be distributed among holders in ways that would not have occurred spontaneously in an open market.
Cons
- If wallet holders must link their wallets to dubious sites in order to claim the airdrop, this may constitute a security risk.
- These might be “pump-and-dump” scams.
- Some investors may be discouraged from joining if they prefer alternate methods of token distribution.
- If the coin does not have liquidity on an exchange, it may be worthless.
FAQs
What is the First Crypto Airdrop?
On March 25, 2014, AuroraCoin (AUR) received the first cryptocurrency airdrop. Every citizen or permanent resident who presented their national ID and got 31.8 AUR, the cryptocurrency intended for the country of Iceland, received 31.8 AUR.
What Is an NFT Airdrop?
An NFT airdrop, like other forms of crypto airdrops, rewards NFT holders with more tokens. This is done to strengthen the community surrounding certain NFTs, generate publicity, and reward NFT holders.
Did El Salvador do a Bitcoin airdrop?
Yes. El Salvador rewarded everyone who installed the government-created wallet with $30 in Bitcoin to encourage Bitcoin adoption as the country expanded its legal tender to include Bitcoins.
What Is the Best Method for Finding Crypto Airdrops?
To generate enthusiasm and knowledge about a coin, crypto airdrops are often disseminated and sold to the general public. Subscribing to airdrop emails or following blockchains on social media will help you find many of these airdrops.
Finishing up
An early Web3 user can benefit from a crypto airdrop. However, while examining these incentives, novice investors should temper their expectations. While some crypto airdrops have proved profitable, just a few are worth thousands of dollars. Furthermore, several schemes that promise significant crypto airdrops are scams.