Every day a new DeFi project is launched. Many of these also activate the accompanying tokens. This has led to the emergence of “airdrops” to draw people into these new crypto ecosystems.
Airdrops occur when cryptocurrencies are distributed free of charge to groups of people. Most airdrops are made on smart contract platforms such as Ethereum (CRYPTO: ETH), Binance Smart Chain (CRYPTO: BNB) and Avalanche (CRYPTO: AVAX).
Each airdrop has its own quirks. Some airdrops are random and do not require any user action. For example, you might check your Ethereum or Binance smart chain wallet to see new tokens that you don’t recognize. These types of airdrops are not uncommon, as anyone can create a new token and send it to the address. However, if you unexpectedly manipulate a token that has been airdropped into your wallet, you need to perform due diligence.
For other airdrops, the user may need to meet some criteria. During the Uniswap (CRYPTO: UNI) airdrop, 400 UNI was airdropped to anyone who had used the protocol before September 1, 2020. The 1-inch (CRYPTO: 1INCH) protocol has also airdropped tokens based on past use of the platform. Both of these airdrops were worth thousands of dollars, but this is an exception, not a rule. In addition, the criteria for these airdrops were not announced in advance, so no one was able to game the system and collect tokens.
“Surprise” airdrops like UNI and 1INCH airdrops can be a storm for platform users, but they can also be unpredictable and unlucky. During these airdrops, only early adopters of the project received something. Since the criteria for airdrops are up to the team behind the project, there is no way to determine what a surprise airdrop will look like or if it will occur.
Many tokens are dropped in the air in exchange for a user performing a simple task. These tasks may follow the project on social media, write blog posts, or disseminate information about the project. From time to time, people with a given minimum amount of tokens will receive airdrops. These airdrops tend to be announced in advance.
But why would someone let go of the crypto?
Many airdrops are an effort to distribute tokens fairly. When a large project launches a token, as in Uniswap, AirDrop rewards previous users who helped the project grow. This helps attract new users who use the platform in the hope that they will also be rewarded. Airdrops can be considered good etiquette by the community. If a successful project launches a newly created token without airdrop, it may be considered to have turned its back on the first investor who made it popular.
Some airdrops are also aimed at investors who have the potential to add value to their projects. For example, a DeFi project might use airdrops to seduce another customer. 1INCH Airdrop has targeted Uniswap users to convince them to switch to competing 1-inch platforms.
AirDrop has also become a popular marketing tool for new DeFi startups. Today, many airdrops are announced in advance or rewarded in exchange for likes and shares. Many development teams use the engagement created by AirDrop Announcements to help them bootstrap their projects from scratch. This is common in small projects with no history or momentum. As a result, the airdrop value is generally low. If the project gains momentum, the value of the tokens will probably be appreciated – making the airdrops more valuable.
How can I get Airdrop?
Most large airdrops were lucky. Sometimes you need to be in the right place and at the right time. However, pre-announced airdrops are available to everyone. These airdrops usually require users to do simple things, such as sharing social media posts or using apps or platforms.
Some websites, such as CoinMarketCap, have an airdrop calendar for new projects, and there are many dedicated websites to highlight the new airdrop. Many projects have announced airdrops on their Twitter feeds, with dedicated Twitter and Telegram accounts to keep track of the latest announced airdrops.
Is there anything else I need to know?
Airdrop is free by its nature, but it requires the user to complete the task and may incur associated network transaction charges. This can vary from project to project, so users should be careful for this reason. Before participating in AirDrop, users should investigate the project to make sure it is legal. Unexpected airdrops need special scrutiny. If you’re not sure if it’s safe, don’t manipulate tokens or projects. If it seems too good to be true, it’s probably.
Airdrops may have tax or legal implications, depending on your jurisdiction. Some airdrops require the user to voluntarily request them, and some are automatically airdropped. Make sure you are familiar with the legal status of the airdrops you plan to participate in.
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