What to Know About Crypto Airdrops

January 20, 2022 12:50 pm

A frequent term that you might hear about if you are involved in the cryptocurrency space is the term “airdrop” which is essentially the distribution of free tokens to members of a crypto community as part of a marketing initiative.

New blockchain projects typically employ this technique and the main idea is to send out newly minted tokens to people so that community members are more engaged with the success of a particular blockchain or crypto project.

There is typically qualifications that are listed in order for somebody to be qualified for an airdrop that is laid out by the project team.

Some example criteria that is usually listed could include following accounts on social media, tweeting, or signing up for an account.

Here is a recent example on Twitter:

Once members of a community do receive tokens from an airdrop, they are also actively involved in wanting the project to succeed as they hold ownership of the project.

News of different airdrops from various different blockchain projects often gather much awareness on social media in recent years as the crypto industry continues to grow.

However, there are some risks to being associated with an airdrop as not all airdrops could be legitimate blockchain projects where the founders are genuinely building something that will have value.

Coindesk explains:

Despite their popularity, however, crypto airdrops aren’t always as risk-free as they seem.

Because recipients receive “free money” in their wallets, there will be airdrops that are nothing more than pump-and-dump schemes.

More specifically, the creator issues a token and hopes there will be enough hype surrounding it to have it listed on an exchange.

Once tokens begin trading, the creator sells their sizeable portion of tokens, crashing the price.

Another potential attack vector is the so-called dusting attack.

A scammer will send a small amount of cryptocurrency to an unsuspecting user to erode their privacy.

Then, the attacker will track down the transaction activity of the wallet tokens distributed to de-anonymize the person or company operating the wallet.

With that being said, there have been very successful airdrops from companies who have then gone one to reach further success and obtain large awareness of their projects.

For example, OpenDao’s airdrop of SOS tokens had helped the company grow its Twitter following to over 60k people and obtain 120,000 wallets to participate in obtaining the token.

If used correctly, it is certainly a valid way to get early access and engaged with exciting and real crypto projects from the very beginning as well as be part of a growing community that is supporting the development of the project.

In 2022, many airdrops for new projects are expected launch so it is important to keep a sharp eye out for interesting opportunities to take as the crypto industry continues to evolve and grow.

In order to ensure that you have a chance in participating in an airdrop, one needs to make sure that you have a crypto wallet ready as you need an address to accept the tokens.

There are many options to choose from in terms of choosing cryptocurrency wallet solutions with Metamask being one of the most popular.

 

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