Cryptocurrency Airdrop

A cryptocurrency airdrop is the free distribution of a newly issued cryptocurrency or token to a specific user or community, usually to promote, promote or reward a project or platform. Cryptocurrency airdrops are sometimes called “freebies” because participants receive a certain amount of currency or tokens at no cost to them. 

History of Cryptocurrency Airdrops

Cryptocurrency airdrops date back to 2014 as a way for users in the Bitcoin community to distribute cryptocurrency among themselves to celebrate or support certain projects or events. For example, in January 2014, a project called "Auroracoin" announced that it would distribute its tokens to all citizens of Iceland for free as an attempt to replace fiat currency. In the same year, another project called "Stellar" also began conducting multiple airdrops, distributing its token "XLM" to different partners, community members, institutions, etc.

2017 was the year of the explosion of cryptocurrency airdrops. With the rise of the Ethereum smart contract platform and the popularity of token issuances (ICOs), many emerging cryptocurrency projects began to use airdrops as a means of publicity and promotion to attract more investors. Many users and investors. For example, on August 1, 2017, a major fork event occurred in Bitcoin, creating a new branch "Bitcoin Cash" (BCH) and airdropping it to all Bitcoin holders at a 1:1 ratio. Coin users. In October of the same year, a project called "OmiseGo" (OMG) also conducted a historic airdrop, airdropping its tokens to all users holding more than 0.1 Ethereum (ETH) at a ratio of 0.07:1. More than 500,000 addresses are involved.

Since 2018, cryptocurrency airdrops have remained a common and effective marketing strategy, but there have been some changes and innovations. For example, some projects have begun to adopt "SmartDrop" or "Conditional Airdrop" methods to determine the number and qualifications of airdrops based on user behavior, contribution, influence and other factors. In addition, some projects have also begun to use "Exchange Airdrop" or "Platform Airdrop" to airdrop their tokens to certain well-known or emerging exchanges or platforms. Users who register or trade on an exchange or platform.

In summary, a cryptocurrency airdrop is a way to distribute cryptocurrency or tokens for free to a specific or random group of users, either as an incentive or feedback, or as a publicity or promotion. 

Process of Cryptocurrency Airdrops

1. The project party or platform party will announce the rules and conditions of the airdrop event on the official website, community, media and other channels, such as the need to register, follow, forward, invite, etc. Investors need to find the right airdrop project. You can check out the latest and most popular airdrop projects on some professional websites, communities, media and other channels, and choose one or more to participate according to your interests and needs.

2. Next, investors need to understand the airdrop rules. Carefully read the introduction and requirements of the airdrop project, understand the purpose, time, quantity, conditions, methods, etc. of the airdrop, and confirm whether you meet the qualifications and conditions.

3. Afterwards, participants need to complete corresponding operations in accordance with the rules and conditions, such as registering, downloading, sharing, forwarding, commenting, inviting, etc., and provide relevant proof or information, such as screenshots, links, addresses, etc.

4. Finally, participants can claim project rewards. Receive airdrop rewards. The project party or the platform party will send the currency or tokens to the participants' wallets at the designated time or stage, or allow the participants to collect them on the designated platform or application.

Purpose of Cryptocurrency Airdrops

To Celebrate a Holiday, Anniversary, Milestone, Etc.

For example, when "Bitcoin" forked into "Bitcoin Cash" on August 1, 2017, all users holding Bitcoin could receive the same amount of Bitcoin Cash for free.

To Attract More Users To Use a Certain Platform, Application, Service, Etc.

For example, “Coinbase” launched the “Coinbase Earn” program in December 2018, allowing users to learn and earn different cryptocurrencies by watching videos and answering questions.

To Increase The Liquidity And Decentralization Of a Currency Or Token.

For example, "Stellar" began conducting multiple airdrop activities in 2014, distributing its token "XLM" to different partners, community members, institutions, etc.

To Support a Social Or Political Goal.

For example, “Auroracoin” announced in 2013 that it would distribute its tokens to all citizens of Iceland for free as an attempt to replace fiat currency.

Advantages of Cryptocurrency Airdrops

• Airdrops allow users to receive some cryptocurrency or token for free, with the potential to appreciate in value or generate revenue in the future.

• Airdrops allow projects to increase the liquidity, popularity and user base of their tokens, which is conducive to building communities and ecosystems.

• Airdrops allow users to experience and learn about different cryptocurrency projects, helping to increase the popularity and education of cryptocurrency.

Disadvantages of Cryptocurrency Airdrops

• Airdrops may have some risks and hidden dangers, such as fraud, hackers, privacy leaks, etc., which require users to carefully screen and participate.

• Airdrops may cause the price of some tokens to fluctuate or fall, as some users may sell or redeem them immediately after receiving the airdrop.

• Airdrops may cause some tax issues, because different countries or regions may have different tax policies for airdrops, and users need to understand and declare on their own.