Best Crypto Airdrops were all the rage at the beginning of the 2010s, when would-be trolls tried to find ways to send random pictures to people who didn’t ask for them. Now, in the world of fintech, a similar strategy is used to get people excited about newly started cryptocurrency projects and raise knowledge of the platform. This strategy is called “crypto airdrops,” and it is a form of marketing.
“In crypto airdrops, you’d open your crypto wallet, and the airdropped item would magically be there,” said Gregory Keogh, SVP of user success at Curios, a white-label NFT marketplace. “It’s a lot like getting a birthday present sent to your house as a surprise.”
What is “Crypto Airdrop” of crypto?
A crypto airdrop is a way for blockchain-based projects to promote themselves by giving away free tokens to a large number of people as part of a larger campaign. This is done by putting the money directly into the user’s crypto pocket.
At the intersection of blockchain and guerilla marketing, these public efforts are meant to raise knowledge about a startup company’s platform or product and get more people to use its native token.
“This is often an exciting way to launch a network,” said Winston Robson, co-founder and CEO of the metaverse marketplace WeMeta. He also said that best airdrops can be used carefully to target people who are likely to be early users.
For example, the NFT marketplace LooksRare gave away its token in an airdrop to users who had done deals on OpenSea, the most popular site in this area.
Robson said that this stunt got a lot of people talking, but it didn’t make LooksRare a real threat to OpenSea in the long run. Many people were excited about the large prize amount, and some, like Robson, took the chance to cash out. However, things changed when the founders of the game had the same idea. Cointelegraph says that the core team took out about $30 million at the time. Even though the developers rejected claims of a rug pull, investors were scared by this, and the value of the native token dropped by 15%.
Robson said that crypto airdrops are usually used to promote new projects, but some current projects use crypto airdrops to thank community members who have been involved for a long time. For example, the 2021 Ethereum Name Service airdrop gave tokens to people who already owned ENS names based on a method that took into account how long their domains had been around.
Different Types of Crypto Airdrops
Depending on what their end goal is, the type of airdrop that a crypto project prefers can be different. Some may use this marketing tool to bring a group back together after a hard fork in a network, while others would rather focus on making first-time users feel cared for. It could also be a reaction to the fact that the market is very competitive. Users can get guaranteed things dropped into their virtual world in a number of ways.
In a normal airdrop, the only thing you have to do is sign up for an account. The key is to act quickly because there may only be a limited number of codes available when a new project comes out, and they may be given out on a first-come, first-served basis. Standard crypto airdrops have been used by the decentralized exchange RabbitX to reward new users who join its site.
Airdrop of bounty
These service-oriented crypto airdrops are kept going by small favors and extra work that people who get them do on their own time. Companies usually need some low-lift promotion work, and people who sign up for a newsletter, follow certain social media feeds across platforms, respond to a project’s latest post, or just log on to a live forum can get a prize. Foodie NFT platform One Rare made a nine-step list of things to do to be eligible for a $75,000 gift. One of the steps was to follow the company’s social media accounts, tag friends, and add accounts to a wishlist.
This kind of airdrop rewards people who have a certain number of tokens at the time of the offer or who are “holding” them. This is based on a scan of all user wallets taken at a certain point in time, which can happen on a certain date or over a certain amount of time. No matter what the prize is, it is given to people who have reached or surpassed a certain amount. Sudoswap, a site for trading NFTs for tokens, has not yet released its own government token, which will be called SUDO. When it does, the first people to get it will be those who have NFTs or Oxmon coins from its sister app, Oxmon.
Airdrop Hard Fork
When a protocol hard forks from its original code and splits into two separate platforms, writers airdrop the new coins as a way to convince native users to switch to the new platform. One example of a hard fork airdrop is ETHPoW, a proof-of-work chain that split from Ethereum after it switched to a proof-of-stake system in an event called “The Merge.” Like holder airdrops, users only need to have the original token to get these.
Only one airdrop
The size of a wallet is not everything. Users are often rewarded with exclusive instant airdrops based on how much time they spend on a project, how much money they spend on non-token activities, or how active they are in a discussion. Exclusive crypto airdrops go to people with empty wallets and a greater interest in a project outside of school. Uniswap’s generous airdrop of 400 UNI tokens to all of its long-time users, regardless of their ownership status, is a well-known example.
If a company reveals a set number of prizes but gets a lot of interest, it may choose to use a raffle airdrop, which is a system for picking winners at random. This choice can also be used as a supplement to any of the other airdrop options. Recently, Revv, Wolf Game, and Phantom Galaxies all gave away $500 worth of their own coins to 100 lucky winners.
How do Crypto Airdrops work?
Once a company decides that an airdrop is the way to go, the first step to making it happen is to start a public campaign. Most of the time, reaching a large number of people is done through communities and social media sites like Discord and Twitter. The news should get people excited about the start of a new platform or feature, as well as the size of the prize.
As the campaign gets more attention, companies make lists of people who might get tokens. This can be done in different ways, such as by getting the wallet addresses of people who are interested or by taking a picture at a certain time to determine if a person is eligible based on certain metrics. For example, if an airdrop is only for people who used a site before September, the screenshot would show the wallet addresses of current users from that time period.
At this stage, companies sometimes ask for more information, like an email address, especially if the company running the airdrop wants to add more people to its contact list.
After figuring out who will get the coins, companies usually use a “smart contract,” which is a program that automatically handles deals, to make the airdrop happen. This program moves tokens from the company’s bank wallet to the wallets of certain players without the participants having to do anything. At this point, companies usually post the results of their transaction blocks to support the project and show that the airdrop really did happen.
Why does a crypto airdrop happen?
Tim Haldorson is the founder of a crypto marketing firm that helps companies start instant airdrops from scratch. In the end, the goal is to get more people to use a platform in a way that doesn’t make coin holders want to sell a lot of them.
Haldorson, CEO of Lunar Strategy, said, “Crypto airdrops are a great way to help new projects stand out and raise awareness quickly.” He also said that there is a way to stop users from flipping coins.
Since airdrops can target early supporters, current members, or highly engaged users of a project, developers need to figure out which way will attract the audience that can give the most to the project at its current stage and how to best encourage the public to want to learn more.
“The goal of an airdrop is to give long-term value to the people who get it,” Haldorson said, adding that airdropping tokens to users who hold crypto from competing platforms that do similar things is a popular strategy in the DeFi space. He said that they are often the best people to hear about the project and are more likely to help after hearing about it through an airdrop.
“However, [a big increase in users] only happens with projects that have a strong team and a clear plan for the future.”
Airdrops of notable crypto
In 2014, the Auroracoin project was the first to use crypto airdrops. Since then, they’ve grown, and some of the biggest names in crypto have used them. These are just a few examples of airdrops that made people aware of them and had an effect on the crypto business.
- Bitcoin Cash
Because Bitcoin Cash split off from Bitcoin, a hard fork airdrop was done in August 2017. Bitcoin Cash was one of the first big splits in the bitcoin network. It promised users 1 Bitcoin Cash (BCH) for each bitcoin (BTC) they owned. In December 2017, BCH was worth more than $4,300 at the height of the airdrop.
Stellar teamed up with Blockchain.com to give away $125 million worth of Stellar lumens (XLM) to Blockchain Wallet users starting in November 2018. This is known as one of the biggest crypto airdrops of all time. After Blockchain.com started the Blockchain crypto airdrops program in October 2018, Stellar became its first airdrop partner. Blockchain.com offered the airdrop so that users could test out the cryptocurrency associated with the new program and use wallets more.
With an airdrop of Uniswap tokens (UNI) in September 2020, Uniswap honored over 250,000 early users of its trading platform. People who had done at least one trade on the platform before September of that year were qualified for the airdrop. Those who got it got at least 400 UNI. Two days after the airdrop, the price of UNI went up by 160 percent. This made people pay attention to the token during the airdrop.