Distributing tokens for free is one of the strategies for blockchain projects to win over users. Learn all about the famous airdrops
The global cryptocurrency market is overheated, and new projects are launched on the market all the time. In the midst of this sea of news, it becomes increasingly difficult for companies in the sector to stand out and conquer users, who are the gear of any business. That’s where airdrops come in.
A marketing action that distributes tokens – usually free – to attract the public. In this guide, shibadrops explains how these actions work and what types exist. It also tells how and where to find airdrops, and what care is needed not to fall into scams associated with this strategy.
What are cryptocurrency airdrops
An airdrop is a distribution – usually free – of tokens or cryptocurrencies to users. The action is a marketing strategy adopted by new companies and projects in the blockchain industry. The goal is to attract stakeholders in the brand, generate engagement, create liquidity for an asset and increase its long-term value.
You know when you pass in front of a perfume store and a saleswoman has a bottle offering a spray? Or when you go to the supermarket and there is a promoter distributing free samples of a certain product? An airdrop works in a similar way.
There is, however, one big difference:
The person receiving the token can make a profit if the project grows and the asset appreciates. This happened, for example, with the beneficiaries of the airdrop of the decentralized exchange Uniswap (UNI), which in 2020 distributed 400 UNI tokens to each eligible participant. In about six months, the crypto asset has appreciated 1,000%.
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But here’s an addendum: Not all digital asset distribution events are true. Some are scams designed to take money away from users. At the end of this guide, InfoMoney explains how to identify serious projects and not fall into a hole.
How crypto airdrops work
Overall, airdrops work in two ways.
Announced: In this case, the projects announce a date for the distribution of tokens. They also post information and rules on their websites, blogs or social media, generating a buzz around the action.
Unannounced: There are also cases of companies that do not make any announcements, and send tokens only to a few selected wallets. The idea, with this type of strategy, is to win users through surprise.
Types of airdrops
There are at least four main types of airdrops.
Pattern
It’s the most basic type of airdrop. Overall, the project transfers cryptocurrencies to multiple wallets, and there aren’t many pre-defined rules.
Of reward
In this mode of airdrop, users need to perform some previously established tasks, such as sharing a post or following the project on some social network. At the time of receiving the tokens, the person needs to prove that he has completed everything that was requested, and present some proof.
Exclusive
Unique airdrops are intended for specific groups of users. Overall, the communities chosen are made up of people who are engaged and loyal to the projects.
For holders
In this style of airdrop, the projects target tokens for holders (or “hodlers” in market slang), a term used in the crypto world to identify people who hold their assets in the wallet. To participate, investors need to have a specific amount of certain crypto in the wallet, previously defined in the action.
How to earn tokens
To participate in cryptocurrency airdrops, you must first have a wallet to receive the token. If the distribution is made on the Ethereum (ETH) blockchain, for example, the interested party must have wallets compatible with the network. Two examples are MetaMask and Exodus.
If the stock is intended for the general public, simply send the address of the wallet to the person responsible for distribution and wait for the assets.
In other types of airdrops, such as reward or holders, users also need to do the stipulated tasks and have in their wallets the amount in crypto stipulated by the organizers to become eligible.
How to find crypto airdrops?
Projects often disclose their airdrops, as well as all rules of participation, on institutional websites, messaging app groups, and on social media. On Twitter, an easy way to find them is through the hashtag #airdrops.
There are also websites dedicated to the topic, such as “shibadrops.com”. In it, it is possible to find lists of campaigns of distributions of cryptoassets that have already been carried out, are in progress or that will still happen.
Forums, digital asset price aggregators, and some exchanges also publicize these events. CoinMarketCap, for example, has a calendar with airdrops that are happening.
Launch pads
Most cryptocurrency airdrops are done on the Ethereum blockchain, devised by Russian-Canadian Vitalik Buterin in 2013. The tokens created on this network are called ERC-20.
There are also projects on other platforms, such as TRON (TRX), EOS (EOS) and BNB Chain (formerly Binance Smart Chain). Binance usually advertises on its ads page the airdrops carried out on its network.
The most famous airdrops
Thousands of airdrops were released after the emergence of Bitcoin (BTC) in late 2008. Check out some of the main ones below.
Auroracoin (AUR)
In early 2014, Iceland made the first airdrop on the market. The country has distributed 31.8 Auroracoin (AUR), a digital currency created as an alternative to Bitcoin, to part of the population. The experiment didn’t work out very well. According to a CoinDesk report published at the time, the price of the asset lost 50 percent of its value after the event, dropping from $11.93 to $7.26. In early 2022, an AUR was worth $0.1.
Stellar (XLM)
In late 2016, the Stellar Development Foundation distributed 19 billion XLM — equivalent to 19 percent of the total crypto circulation at the time — to BTC holders. Early the following year, the company sent another 16 billion tokens to the same audience. At that time, an asset was worth less than $0.002. Five years later, it jumped to $0.1 – up 4,900%.
Uniswap (UNI)
In September 2020, decentralized exchange Uniswap sent 400 UNI to each user who had used its platform before that month. At the time, according to Coingecko, one unit of the asset was worth $3.44 — that is, each person received nearly $1,400.
Over the next six months, the crypto appreciated 1,000 percent, jumping to $42, and those who held it were left with the equivalent of $14,2022 in their wallets. Over the past two years, however, the UNI token has retreated, and by early 9, it was trading at $14.<>.
Ampleforth (AMPL)
The Ampleforth protocol in April 2021 sent its new governance tokens, called Ampleforth Governance Token (FORTH), to anyone who had AMPL, its other asset, in the wallet. Nearly 76,48 wallets were eligible. FORTH, however, suffered a sharp devaluation in the months following the airdrop, dropping from $95.6 that month to $84.2022 in early <>.
Blows with airdrops
The airdrop boom has also attracted scammers. Check out some of the top scams below.
Pump and dump
In cases of pump and dump, scammers issue tokens, store most of them in their wallets, and distribute a few units to a few people. Then they use groups and social networks to generate a buzz around the project, inflate the value and be able to list it on some exchange. As soon as the tokens start trading, cyber criminals sell their crypto assets, make a buck and drop the price, leaving the other holders at a loss.
Spoofing
It is a type of scam in which the scammer impersonates another person, government, company or project to get data or take advantage of users. This is what happened with the Ukraine airdrop, mentioned at the end of this guide.
Phishing
Another common scam with cryptocurrency airdrops is phishing. In general, a cybercriminal creates a fake website of some known project and begins to disseminate on social networks an alleged airdrop. In the disclosure, it asks the user to enter the electronic address created, make a registration and connect your wallet to participate. As soon as a wallet is connected, however, all of the person’s cryptocurrencies are stolen.
Dusting atack
In this fraudulent scheme, a scammer sends a small amount of cryptocurrency to a wallet. As the amount forwarded is minimal, many investors, especially the big players, do not pay attention to the “gift of Greek”, and leave the cryptos in the wallet. With this, however, scammers are able to track the recipient’s movements and break their privacy.
How not to fall into scams with airdrops
In order not to fall for scams or bet on projects with no future, users should research everything about the token offered, according to Safiri Felix, director of Products and Partnerships at Transfero.
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“It’s important to evaluate the history of the project, check who the people are and understand the proposal. The most recommended thing is that the person look for as much information as possible available,” he said.
“Following the project’s communication channels, such as Twitter, Telegram and Discord, is also key. In these channels you can already measure community engagement and collect information about development,” he added.
Airdrops with sites full of broken or unfinished links, false information about partnerships and unclear rules of participation should also be viewed with suspicion, according to the website “shibadrops.com”.
Another tip is to never, in any way, send cryptocurrency or money to projects that ask for one crypto in exchange for another. If any company makes a promise like “Send Bitcoin and earn double the amount on the airdrop,” drop it.
The use of airdrop during the Russia vs. Ukraine war
Ukraine, when it was being invaded by Russia in early 2022, received millions of dollars in cryptocurrency donations to assist its military. As a form of thanks, the country announced that it would hold an airdrop to send “thank you” tokens to its donors. But it didn’t quite work out.
On the day the distribution was released, a scammer created tokens and began distributing it with the aim of making the community believe that such an asset was from the Ukrainian government, which was not true. This type of scam is called “spoofing,” and it occurs when someone or a group pretends to be someone else to take advantage of users. This situation caused the government to drop the action.
On Twitter, the country’s deputy prime minister and minister of digital transformation, Mykhailo Fedorov, said that “after careful consideration,” he decided to cancel the submission. He also said that the nation would create non-fungible tokens (NFTs) in support of its military. Unlike “ordinary” cryptos, NFTs are not unique, such as works of art, and cannot be duplicated.