What are 'Airdrops' in the Crypto World?

They say that there is no such thing as free lunch, but if you are an experienced crypto enthusiast, you know that there is a legitimate way to obtain free tokens. It is called the airdrop.

Novice crypto investors have probably heard of this term but chose to ignore it simply because they took it for some Ponzi scheme. In reality, the token airdrop is a commonly used, and sometimes really efficient, marketing tool aimed at attracting the attention of crypto community to the emerging blockchain projects.

The definition of the airdrop

To put it in proper terminology, airdrops in the crypto world imply the free distribution of tokens used as a part of a marketing strategy aimed at raising public awareness about an emerging blockchain project.

The term “airdrop” itself is a reference to the organized delivery of supplies, reinforcements, and leaflets by means of military aircraft. Given the context, it is possible to compare the token airdrops with the airborne leaflet propaganda which was actively used during World War II.

Token airdrop is often used not only by the little-known blockchain projects but also by various blockchain platforms, blogs as well as the developers of software and dApps.

How airdrops work

The public gets to know about an upcoming airdrop in many different ways though usually the same mechanisms that work for promoting an ICO or a bounty campaign are being applied during the airdrop campaign:

• The initiators publish the corresponding messages on popular crypto forums and discussion boards, such as BitcoinTalk;
• Place the announcements on dedicated websites, for instance, airdropalert.com;
• Create groups and communities on social media outlets like Twitter or Telegram.

It is important to note that the information about the upcoming airdrop is usually published just before the launch of the drop in order to provoke a hype. The promotional campaign usually reaches its highest intensity right after the start of the airdrop.

During the airdrop, the holders of a certain cryptocurrency, usually it is Bitcoin, Ethereum or their forked coins, or some other ERC-20 token, or the pre-registered users receive newly minted tokens to their crypto wallets. The holders of the designated ‘parent’ cryptocurrencies receive new tokens automatically, sometimes without being aware of the ongoing airdrop. 

The number of tokens received through the airdrop usually vary and depend either on the quantity of crypto that had been present in the wallet before the airdrop launch or on the activity displayed by the user in social media or discussion boards.

Once the airdrop is completed, the happy owner of new tokens could either “HODL’ in hopes that they will go to the Moon or wait until they get listed on a crypto exchange and begin trading.

What one needs to participate in the airdrop

It should be obvious that in order to receive tokens through the airdrop, the user would have to have an active crypto wallet, preferably an Ethereum one since the vast majority of airdropped tokens are ERC-20 compatible. The ‘active’ status of a wallet implies that it must display some activity because most airdrop projects conduct the corresponding checkup to avoid sending tokens to the randomly generated wallets.

Also, the user should have an active social media account to be able to participate in a promotional campaign. Being a social media influencer would be immensely beneficial since the final amount of tokens in the wallet largely depends on the buzz around the airdrop that the user manages to create among his or her followers.

The airdrop initiators may also ask the user to follow their project on Twitter or join the Telegram channel. Once these requirements are met, one can expect to see new tokens arrive at his wallet by the end of the airdrop.