The following article is about Crypto Airdrops. Explaining and exploring what the idea holds and the possibilities it creates for all kinds of users is something that will be focused on in this article. Hence it is advised to read the entirety of the article to get a good grasp of what is being explained.
In approaching the topic of Crypto Airdrops, the following points in the order of their statement will be discussed:
What are Crypto Airdrops?
- Third Party Trackers
- Only to raise awareness?
- Crypto Airdrops in action
- Major Risks and how to avoid them
Before jumping on to the main contention points noted above, let’s start off with an introduction to the topic to ensure a smooth transition going in.
Think of the last time you went to your local supermarket. Let’s say you had to pick up a kilo of yogurt and as your eyes scanned the chilled items and foods aisle, you notice you have a huge range of Yogurt companies to choose from. This may be a good thing for you, as companies would, in order to make you choose their product, work hard to ensure you like it.
However, for the companies in the Yogurt selling business, this means more competition they face to get to you. Now this means the company is going to have to sort out tactics of marketing that are highly likely to ensure you buy their product.
So what do they do? Set up a mini-stall where they give out free samples of the very yogurt they are selling. Facilitated by a company employee, this physical interaction leads to you not only getting free yogurt but also allows you to test it without risking any of your hard-earned cash. Plus, any questions you may have can be answered by having participated in this interaction as well.
Now, this form of marketing exists in not just supermarkets, but in all forms of places where companies are fighting each other to ensure you choose them. From the low-scale vendors, you may meet on the streets to large industries trying their level best to ensure they have an edge over their competition, giving away their product, or a sample of it at least is a strategy that may be as old as selling itself.
Nevertheless, as stated, this very marketing tactic is used in a lot of places as it is highly versatile.
Where there is high competition, there is pressure on sellers to carry out innovative marketing. This key fact is how the market operates and this is the reason why we see innovation in the industry itself. In this article however, our focus is on innovation of a particular kind of service provider in terms of how they market themselves.
In the following article, we focus on the cryptocurrency industry. Booming as of 2022, the industry has seen wide acceptance in a lot of different areas. However, like big supermarkets, a bigger cryptocurrency market means there is a high level of competition to be faced by individual or even group entities willing to make a market share of their service.
In order to climb the competition ladder, many cryptocurrency developers are using a wide range of tactics to make potential users aware of their existence. Whether it be through social media ads where they make convincing pieces of digital design material allowing users easy access to their ecosystem, or hiring journalists to write articles about the benefits of their cryptocurrency in a famous online blog; nothing beats the old fashion marketing tactic of giving away your product for free.
What are crypto airdrops?
As the introduction of this article would make you think, yes. Crypto Airdrops are basically free giveaways of cryptocurrencies but a simple statement like that is hardly going to give you enough information to learn about how the entire system of distributing cryptocurrencies works in theory, and how it is practically applied.
Moving towards a formal definition; Crypto Airdrop is a marketing strategy where a developer or a group of developers may distribute tokens of their cryptocurrency among target users in order to promote its usage. As the cryptocurrency market is so huge, there is an increasing need for developers to hand out their tokens using such marketing tactics.
When we say the cryptocurrency market is huge, we actually mean it. As of December 2021, there are more than 8000 coins in the cryptocurrency sphere with many more being released by aspiring startups every now and then. In order to fight such fierce competition, any starting coin must obviously be adopted by a large group of people. This is what developers try to achieve with Crypto Airdrops.
Essentially at its core, crypto airdrops are indeed another word for giving away tokens of a new cryptocurrency, but in its execution are some details interesting to read and beneficial to learn from.
In terms of executing crypto airdrops, startups need to ensure they have a good plan of how they are going to be presenting the entire giveaway to the cryptocurrency community.
Indeed, when trying to portray your coin as a sophisticated one, there may be a fine line between offering potential users a free token so that they can be familiarized with the technology or just outright seeming to be too needy.
Hence, in order to avoid making mistakes in the very fragile beginnings of a new cryptocurrency marketing round, developers need to ensure they are planning out the entire marketing round in advance. This could mean making a calendar with regards to prioritized media publishing, brainstorming the traits of your potential audience and planning a strategy to change things as feedback starts coming.
The usual manner in which new cryptocurrency projects start off their crypto airdrops is by announcing them on the internet. Now there are several places on the internet which are usually approached by startups as the platforms themselves are quite welcoming. Thus, they usually post the news on their own website which is boosted by social media ads. Along with this, they may also use a Medium page to carry out the announcement of their crypto airdrop.
A major kind of platform where new cryptocurrencies start their projects are third-party airdrop tracker websites. These websites are oriented towards delivering the most trending news along with offering information about new coins to cryptocurrency enthusiasts. They are primarily focused to target the audience the likes of which are interested in crypto airdrops themselves.
Understanding how these platforms work may very well allow us to understand the distribution of crypto airdrops in the cryptocurrency sphere allowing startups to market their newly developed coins.
These platforms feature user-friendly interfaces that purely draw attention to the crypto airdrops being offered so a good amount of the job that is to be done now falls in the hands of the developer which now decides the token amount and how they are offering it.
These platforms are focused on creating a situation that many can refer to as a ‘win-win’ one for both the consumer and the developer. In order to ensure they meet this essential goal which they operate for the assurance of, they have a variety of distribution conditions for Crypto Airdrop as well.
Some are purely known as “airdrops” where the developer gives away free coins to participants. However, there also exist “bounty drops” which play a crucial part in the crypto airdrop industry.
As we stated earlier, the platform seeks to create a win-win situation for both the developer and the end user. In order to ensure it happens, “bounty drops” were introduced where the free coins are distributed upon the completion of a simple or a few simple social media tasks. This may be joining the developer’s telegram group, or sharing their desired post on social media, etc.
They always however ensure that the tasks assigned are simple enough so most people can carry them out and make sure that the tasks benefit them in terms of raising awareness about their project. Hence, by making users like a post of the project’s social media and making them share it, lets say, the users get rewarded some tokens and in doing so, easily raise awareness by doing something as easy as tapping their screen a couple of times.
It should be noted, however, that these third-party platforms that are solely or primarily focusing on facilitating crypto airdrops being accessed by cryptocurrency enthusiasts, make sure to use a number of strategies to ensure cryptocurrency projects get as much reach and the right kind of reach as possible.
This means they may look at other distribution tactics which allow better targeting. Better targeting here means in terms of cryptocurrency startups being able to target their crypto airdrops to the right kind of people, within the cryptocurrency community.
To achieve better targeting, crypto airdrops oriented third-parties resort to only allowing certain types of people to receive the airdrop. This is done via analyzing the wallet the user is asking the airdrop to be made to. If the wallet matches the conditions that need to be necessarily present for the user to be eligible for the receiving of the airdrop, the airdrop is sent. However, if the wallet does not match the criteria set by the developers carrying out the airdrops, the airdrop is not made.
A good example of criteria or conditions that developers of new cryptocurrencies enforce is holding a certain coin. For example, if you hold any amount of BTC in your wallet, you may be eligible for certain airdrops.
There is indeed a name for airdrops that are specifically focused on wallets holding a certain coin(s). They are called ‘holder’ drops and are willing to drop cryptocurrencies into wallets where their desired coin is present, with a specification of timeframe or not. Sometimes, the developers put a condition of holding coins, in specific timeframes. For example, eligibility for a certain airdrop might only be received if you owned BTC before 2nd August 2017.
Another common example of an eligibility condition developers may force is the condition of having carried out transactions using the particular wallet you request to receive your airdrop in. The additional layer of timeframe may or may not be added to this. For example, you must have carried out at least 4 transactions in the last month in order to be eligible for the airdrop of a certain coin.
Hence, the wallet becomes the canvas the cryptocurrency companies analyze a target consumer off of. This puts pressure on cryptocurrency enthusiasts to maintain their wallets ensuring they seem reliable and more likely to be favored by new startups.
Claiming airdrops is a simple process for end consumers as well. If they are participating in a bounty airdrop, they have to sometimes attach a screenshot of their completion of required activity as proof and their wallet address in a form created by the startup company. Usually, users are required to attach their wallet address in a form in order to receive crypto airdrops. What else they have to attach in forms is dependent on the conditions attached to the crypto airdrop itself.
Only to raise awareness?
However, it is not just to spread awareness about their new cryptocurrency which leads many crypto startups to allow their coins to be airdropped. As a lot of these cryptocurrency startups understand their coin is relatively new, they need to make it hold some value. That value will not be present if the market is not exposed to the very coin itself. What is not on the market, cannot be traded and hence, in this case, does not have a market price.
In order to establish their coin with a value, some developers might look at crypto airdrops as a potential option. By allowing a large number of people to have access to the coin, they allow these people the ability to trade the coin. Whether the traders want to sell this coin to others as quickly as possible, or whether traders are willing to pay high amounts to gather as many tokens of the particular coin as possible, determine its value.
Crypto Airdrops in action
Now while you have read about cryptocurrency airdrops in theory, let us look at this concept being applied to the real world, quite successfully actually.
Uniswap for example is the world’s top most popular decentralized exchange or DEX for short, chose to airdrop its native asset which is the UNI. It only let users who had performed a transaction on their platform before the 1st of September 2020, be deemed eligible for receiving the airdrop. Each account received 400 units of the UNI.
Most who received it quickly got rid of it when it was exchanging hands at anywhere around $2 to $4. However, those who held on to the asset were rewarded for their risk taken as the asset’s value surged along with the Decentralized Financial ecosystem. Currently, as of January 2022, it stands at $18 in value.
Major Risks and How to avoid them
As the world of cryptocurrency is almost all virtual, the risks applied to the virtual functioning of any technology over the internet apply to cryptocurrency and inherently, to crypto airdrops as well. While the idea of free cryptocurrency sounds good and in many cases it is, this very notion is exploited by those who want to profit off of scamming people online.
Cryptocurrency hacks and many scams are becoming more and more the norm in the cryptocurrency community. They are getting more and more believable being able to trick the most seasoned of investors. Hence in order to stay safe and ensure your funds are only used by you, you must make sure a few measures are in place.
One general rule is to stay away from any projects that promise to send you cryptocurrencies only if you send a few funds to them first.
Another thing to look out for is “dusting” attacks where some airdrops might merely act as mechanisms to extract your personal information out of you. They will send a small amount of crypto to your wallet and then use your now accessible public address to see your cryptocurrency holdings in that wallet.
If you are holding a good amount and value of cryptocurrencies, the very project that targeted you, and the hackers within it may start attacking you specifically through virtual and/or physical means.
Hence, always create a separate wallet for airdrops.
Researching from multiple verified sources is a must as well. Phishing attacks are highly common in this space and to ensure your personal information is not stolen because you misspelled the URL of a site you trusted, use bookmarks. Many fake scammers pay social media sites to advertise their illegitimate schemes to lure in vulnerable people so be highly careful in visiting only verified sites when researching on the web.
This article intended to explore the idea of Cryptocurrency airdrops. Approaching this idea starting from an example everyone can relate to.
The example mentioned was one of free samples in supermarkets. The point of discussion transitioned from there to the distribution of cryptocurrencies for free for awareness and establishing initial value for the cryptocurrency itself.
There was also a real-life example of Uniswap quoted along with the potential risks and how to avoid them discussed in the end.