Startups in the blockchain space often use Airdrops to drive engagement into its project. It is the practice of literally dropping – or posting – cryptocurrency into a wallet of a participant.
Typically, Airdrops will only ever be advertised through the official channels of a company and beneficiaries will be required to complete tasks or hold a minimum amount of the coin in a wallet to qualify for an Airdrop.
Once qualified, the recipient will get a set amount of tokens or coins as a result of the Airdrop. Like all cryptocurrencies, the value can rise and fall without warning.
How Do Airdrops Work?
There is a methodical process that unfolds for many who participate in an Airdrop. It tends to go something like this:
Step 1: Research and Find Airdrops
Find the upcoming airdrops that interest you. There are various websites and forums dedicated to listing upcoming airdrops. Just ensure you verify the legitimacy of the airdrop and the project behind it before participating. Scammers often try to take advantage of airdrops, so be cautious and do your due diligence.
Step 2: Fulfill Requirements
These can vary depending on the project, but common ones include following their social media accounts, retweeting or sharing their posts, joining their Telegram group, or completing KYC (Know Your Customer) verification.
Step 3: Prepare Your Wallet
Most airdrops are conducted on the Ethereum blockchain, so having an ERC20 compatible wallet such as MyEtherWallet or MetaMask is recommended. If the airdrop is for a different blockchain, make sure to have a wallet that supports that specific token.
Step 4: Submit Your Information
This can usually be done through filling out a form or sending an email with your information. Make sure to follow their instructions carefully and provide accurate information.
Step 5: Be Patient
Some Airdrops can take some time to distribute the tokens, especially if there are a large number of participants on new blockchains. Some airdrops may also have specific distribution dates, so make sure to check for any updates from the project.
Step 6: Participate in Community Activities
This might include joining their social media groups or forums, interacting with other members, and staying updated on their progress. Not only does this help you stay connected with the project, but some airdrops may also require participants to be active in their community to receive the tokens.
Step 7: Secure Your Tokens
Once you have received your airdropped tokens, make sure to secure them in your wallet. This can involve setting up proper security measures and storing your private keys safely. As with any other cryptocurrency or token, it’s important to take precautions to protect your assets.
What Types Of Airdrops Are There?
Traditional Airdrops
This is how Airdrops are usually administered and are awarded to individuals who complete certain tasks. These tasks can include joining social media channels, referring friends, or participating in surveys. The purpose of traditional airdrops is typically to raise awareness and generate interest for a new project or token.
Fork Airdrops
Fork airdrops occur when an existing cryptocurrency splits into two separate currencies, resulting in all holders of the original currency receiving an equal amount of the new currency. This type of airdrop is not as common as traditional airdrops but has gained attention with popular forks such as Bitcoin Cash and Ethereum Classic.
Holder Airdrops
Holder airdrops are similar to traditional airdrops, except instead of completing tasks, individuals receive tokens based on how much they hold of a particular cryptocurrency. The more you hold, the more tokens you will receive in the airdrop. These types of airdrops are often used by projects to reward their loyal supporters and encourage holding of their token.
Bounty Airdrops
Bounty airdrops are a type of traditional airdrop where individuals can earn tokens by completing specific tasks or providing services to the project, such as marketing or development work. These tasks are typically more involved and require specialized skills, but can result in larger rewards for participants.
Snapshot Airdrops
Snapshot airdrops involve taking a snapshot of an existing blockchain at a certain block height and distributing tokens based on the amount held by individuals at that time. These types of airdrops are commonly used by new projects looking to distribute tokens to holders of established cryptocurrencies, such
Conclusion
If ever you are invited to participate in an Airdrop campaign, be sure to do your research and figure out if it’s a project that you are passionate about. They can be fulfilling and rewarding experiences.
