28 February 2020
Cryptocurrency Airdrop is distributing tokens to a large number of wallet addresses. It is completely free money handed over by various blockchain enterprises. Well, this sounds a little weird right? The fact behind this madness is marketing strategies that benefit the enterprises in the long run. In this guide, let’s understand what are Airdrops and how it helps the company grow.
When does Airdrop occur?
Airdrop usually occurs in two different ways; the first way includes selecting recipients at random while the second way includes the airdrop-related announcement on bulletin boards or newsletters. Random selection is often performed by the established blockchain-based enterprises while the announcement of the airdrop is given by the blockchain-based startups to boost their cryptocurrency projects. In order to get the benefits of the airdrop, the various task has to be performed by the user and free tokens are released on the day of an airdrop.
Types of Airdrops
Bounty Airdrop: User must tweet about the project to get eligible for this airdrop.
Standard Airdrop: For getting qualified this airdrop signing up a newsletter with your name and email ID for updates is mandatory.
Holder Airdrop: For getting qualified this airdrop holding certain specific tokens in your wallet is mandatory. For eg., if you hold EOS tokens in your wallet you will be eligible for EOS-based crypto airdrop.
Hard fork Airdrop: if a coin hard forks from its original protocol, the holder of the original coin is eligible for the airdrop.
Exclusive Airdrops: This kind of airdrop is reserved for a specific community only like a loyal/VIP member of a particular project.
Requirements for Airdrop
Cryptocurrency wallet: a multicurrency wallet that is ERC20 compatible is good to get as majority cryptocurrency tokens in the market are ERC20 tokens
Active wallet: Just registering and generating a bunch of addresses won’t work, the wallet must have some amount of coins.
Why an Airdrop is carried on?
The main goal of carrying out a cryptocurrency airdrop is to create awareness, build the buzz and hype about the blockchain-based projects which can be a start-up or a well established. The following are some of the other reasons:
Surprise Gifts to loyal customers: Airdrops can be used to appreciate and encourage users to continue using blockchain based services like cryptocurrency exchanges, trading platforms, wallet service providers, etc. This can be done by giving surprise gifts in the form of free cryptocurrency tokens to loyal customers.
Equal distribution of the total token supply: In order to prevent any user to hold a maximum number of tokens in a network and create centralization. Airdrops can be the best solution for a company to ensure that their tokens are evenly distributed and it’s truly decentralized.
To get potential investors/users: Airdrops can be a tool optimized/used by blockchain-based enterprises to generate potential users through their marketing campaigns and increase participation. Users are asked to fill online forms that contain valuable user information that can be used to develop targeted marketing strategies.
Creating awareness about a new cryptocurrency: In order to bootstrap and create awareness about a new cryptocurrency, airdrop can be a helping hand. Because many times a new cryptocurrency can go completely unnoticed if there is no appropriate advertisement is done. Airdrop can double user participation through various marketing campaigns and organic engagements like Word of mouth advertising that attracts people on the basis of getting/earning free tokens.
Points to remember
The increasing popularity of cryptocurrency has also increased the scams around it. Please stay updated and safe by following steps:
Don’t reveal your private keys: If private keys are asked, avoid giving because it is a scammy project as no one needs your private keys during Airdrop.
Don’t send money to anyone: If money is asked, avoid giving because it is a scammy project as an Airdrop will never ask you to send an amount to any address.
Don’t trust unofficial sources: If an enterprise is offering an airdrop, it will always be announced on official social media platforms like Twitter and Telegram.
Airdrop can be truly beneficial for both blockchain enterprise by getting potential customers and users for getting free tokens. The only important point users have to keep in mind is while participating in the airdrop also be security conscious and check the authenticity of a cryptocurrency airdrop campaign.