Airdrop is a procedure for distributing tokens to holders of certain cryptocurrencies, for example, bitcoin or ether. In essence, this is a marketing strategy, and its purpose is to disseminate information about a product, coin or cryptocurrency exchange. Recently, such a strategy has become increasingly popular, as many social networks prohibit advertising of virtual coins. Also, the promotion of cryptocurrencies in the USA can lead to additional taxes.
Coins that are issued by the airdrop method are similar to free samples of goods in shopping centers.
Beginner projects often give out a small amount of free tokens to trusted people in order to talk about their project, and this is often done in advance of the ICO.
According to Omise CEO June Hasegawa, his company developed the airdrop concept based on the Ethereum network in August 2017. Then she announced that she would transfer OMG tokens to each wallet with a balance of at least 0.1 ETH.
Omise decided to conduct an airdrop so that people would know about this project. However, Hasegawa speaks of the wider advantages of such a distribution model:
The real value of ethereum projects with airdrop for all ether owners is that it is an economic mechanism designed to bring together all ethereum communities – from developers to users.
An example of Omise with its airdrop was adopted by many new projects as a PR strategy. If in August 2017 the average number of airdrops per month was two, now now there are at least five such distributions every day.
Cryptocurrencies are valuable only because people believe in them and recognize their value. The more people own digital currencies, the higher the likelihood that they will be widely accepted and their value will increase. Airdrops are also effective due to the effect of possession, or possession. This is such a phenomenon in which people attribute value to things only for the reason that they own them.
One of the main reasons for using Airdrop is in the relatively recently introduced restrictions on the promotion of ICOs, which turned out to be painful. Companies that launch tokensales can no longer use either Facebook or Google to promote their projects (although it seems that FB will allow such ads again). Thus, the best way to promote the product was airdrop.
There are many reasons why ICOs give out tokens for free, and here are the main ones.
- Popularization: delivery of tokens to as many wallets and people as possible in order to create a strong database of active users who will become real customers. The wide distribution of tokens becomes an important point, as many projects consciously strive for a network effect.
- Raising user awareness: usually a material interest in a particular token is more actively formed after the token is listed on any exchange.
- Raising capital: financing future developments and expanding the project.
Types of Airdrops
Marketing campaigns are usually the most successful when potential customers and investors receive the product for free. Cryptocurrency airdrops have a similar concept. Most often, such schemes are used as part of the ICO, when blockchain startups transfer free tokens to potential customers. In the past, many companies have successfully advertised their tokens in this way: Aktie Social, Eligma, BunnyToken, etc.
There are two types of airdrops:
- Traditional, when free tokens are distributed between existing owners of certain cryptocurrencies, for example, bitcoin or ether. Users are rewarded simply for storing or using coins. No response is required from them.
- Bounty Airdrops – rewarding users with tokens for performing simple tasks on social networks, for example, for subscribing to Telegram, reposting on Twitter, etc.).
How to participate in airdrop
To participate in traditional and bounty airdrops, users will need the following tools:
- Ethereum wallet, but not one that is integrated with any exchange. This should be a wallet with a personal address that is compatible with the ERC20 standard, as with most airdrops, tokens are issued on the basis of ethereum. The wallet must be activated, otherwise it will not be possible to receive free tokens.
- Twitter account. The organizers of many airdrops want the participants to monitor the activity of the project in this social network. Some ask for retweets.
- Email. Sometimes with airdrops you need to specify an email address.
- Referral code. It happens that in order to participate in the airdrop you need to register through someone else’s referral link. In this case, it is usually sufficient to enter the participant’s name and email.
How to find an airdrop
There are several important sources of airdrop information on the Internet:
- Bitcointalk is one of the oldest and largest cryptocurrency forums. Usually it is here that new projects are announced, and this is a great platform where you will learn about new ICOs. On Bitcointalk it’s convenient to keep track of your project history.
- Airdrop aggregators are sites that study projects for legality and solvency. Examples of good aggregators: Airdrops.io, Airdropking.io, Airdrop Alert, and subreddits Airdrops and CryptoAirdrops.
- Special platforms, for example, Earn.com, allow participants to register by providing their wallet addresses to participate in a variety of airdrops. On the Tokens Marketplace in the Airdrops category you can find a list of current distributions.
- Specialized chats in Slack, Telegram or Discord. Many interesting distributions can be found in the #freecoins channel of the Coinspot chat.
The future of airdrops
Search queries “airdrops” and “free tokens” will point to many sites, subreddits and Telegram channels where distributions are being conducted. There is even a Pokemon Go game simulator that allows startups to distribute free tokens to people playing games created using augmented reality technology.
Since August 2017, airdrops have experienced massive growth, and they are already considered the new cryptocurrency world mania. So, starting in July 2017, 467 such campaigns took place, and 96 are in effect at the time of this writing.
Airdrops as a Percent – Upcoming, Ongoing, and Past
About five new airdrops appear on various websites every day, and their number is growing. However, many are advised not to mess with them.
Brighton Williams from the Boost VC cryptocurrency venture capital fund, which advocates for cryptocurrency projects to have a strong community, believes that airdrop organizers could better work with users. For example, they should choose potential participants by geographical, demographic characteristics, etc., in order to grow a good market for the future platform.
It is too early to say what the airdrop boom will lead to, but most agree that ICOs need real users who are interested in tokens and have access to them.
It is important that people in pursuit of free tokens do not lose their vigilance, for example, under no circumstances give out their private keys, do not forget that there are a lot of scammers around cryptocurrencies, and always conduct their own research before connecting even to the most tempting Airdrop.