What Are Airdrops In Crypto? Types, Benefits & How to Get Them

Home / Blog / Cryptomania News / What Are Airdrops In Crypto? Types, Benefits, and How to Grab Yours

You probably want to know more about crypto airdrops, as they are a great way to get free crypto. It sure would have been nice to get airdropped some free Uniswap or Stellar, for example. There was a time when they were worth just a fraction of what they’re worth today.

This article will explore crypto airdrops, how they work, and how you can benefit from them.

Table of Contents

Key takeaways

Definition: Crypto airdrops are marketing strategies blockchain projects use to distribute free tokens to digital wallets to enhance visibility and engagement.
Types of airdrops: Airdrops include standard, holder, bounty, raffle, exclusive, and liquidity airdrops, each serving different promotional purposes.
Benefits: Airdrops offer users free tokens, generate excitement, provide educational opportunities, and can help bootstrap a project’s user base and ecosystem growth.
Precautions: Users must verify the legitimacy of airdrops to avoid scams, never share private keys, and be aware of potential tax implications and market volatility.
Participation: To participate in airdrops, users typically need to register, hold specific cryptocurrencies, complete promotional tasks, or engage with the project in specified ways.

What is a crypto airdrop?

As mentioned, in crypto, airdrops let projects give out free tokens and attract interest. During a crypto airdrop, projects send free tokens directly to users’ wallets. This strategy helps new projects gain attention, distribute tokens to users, and boost trading activity.

By taking part, you can get free funds, make the market more exciting, and even get governance rights in projects. There’s more to it than just getting free tokens, though. There are different kinds of airdrops.

How does a crypto airdrop work?

A crypto airdrop works like this: a project sends free tokens directly to users’ wallets. The project typically identifies eligible wallets based on certain criteria, like holding specific tokens or completing tasks. Once the list is ready, the tokens are transferred to the wallets using blockchain technology, which records the transaction securely and transparently. The user doesn’t need to do anything — if eligible, the tokens just show up in their wallet.

Usually, you need to do small tasks like signing up for a newsletter or following the project on social media. Perhaps liking/reposting stuff on X. Sometimes, you just need to hold a certain cryptocurrency to qualify.

There are different kinds of airdrops, like standard, bounty, holder, exclusive, and raffle airdrops. Each type has its own rules for how to get the free tokens.

Airdrops give you a chance to get free crypto and join exciting new projects early on. But you need to be careful. Always check if the airdrop is real to avoid scams.

Types of crypto airdrops

Crypto airdrops come in different forms, each with its own way of giving out free tokens. Knowing the types of airdrops can help you get more chances to grab free tokens.

Standard: Free tokens are given to people who register their wallet addresses. It’s usually first come, first served. All you need to do is sign up and share your wallet address.
Bounty: You earn tokens by doing promotional tasks like sharing posts on social media or promoting the project. The more you contribute, the more rewards you get.
Holder: If you own a specific cryptocurrency, you might automatically qualify. The number of tokens you get depends on how much crypto you hold on a certain date.
Raffle: You earn lottery tickets by completing activities. Winners are randomly chosen to receive tokens. Being active improves your chances of winning.
Exclusive: These are for a select group of users, like loyal supporters or early contributors. Staying involved in the project can earn you these special rewards.

Of course, one project can have multiple types of airdrops. For instance, they may have a round with a bounty airdrop, followed by an exclusive airdrop for early supporters. Just because a project has already had an airdrop, it doesn’t mean they can’t have another.

Benefits of crypto airdrops

When you participate in crypto airdrops, you get to boost your cryptocurrency portfolio with free tokens. It’s a great way to get something for nothing (or almost nothing).

Let’s take a look at how crypto airdrops benefit both you as a user, as well as projects themselves.

Benefits for users

Crypto airdrops have lots of benefits for users. Here’s why they are great:

Get free tokens. Airdrops give you free crypto tokens, so you can grow your collection without spending any money.
Chance to make a profit. The tokens you get might become more valuable in the future, especially if the project is successful.
Learn about new projects. Airdrops are a good way to try out new blockchain projects and learn how they work. This helps you keep up with crypto trends.
Be part of a community. Getting tokens connects you to a group of people who are excited about the project. It’s a fun way to feel included and stay involved.
Have a say in projects. Some tokens let you vote on important project decisions. This means you can help guide how the project grows.
Easy way to learn crypto. Airdrops let you use wallets and tokens. It can help you learn about the crypto world in a simple and practical way.
Support new ideas. By joining airdrops, you help new projects grow. In return, you might get even more benefits as the project succeeds.

Benefits for projects

Crypto airdrops aren’t just great for users, they also help blockchain projects in many ways. Giving out free tokens is a smart way for projects to get noticed and attract new users. Here’s how airdrops help projects:

Boost visibility. Airdrops create excitement. They grab the attention of potential users and investors, making the project more visible.
Build a community. By giving out free tokens, projects can quickly grow their user base. These users are more likely to stay engaged and support the project.
Smart marketing. Airdrops let projects learn about their users. This helps them plan better marketing and create stronger connections with their community.
Reward supporters. Airdrops are a way to thank early users and loyal supporters. They’re motivated to stay involved and invest more in the project.
Save on advertising costs. Compared to traditional advertising, airdrops are a cheaper way to promote a project while still reaching lots of people.

How to get crypto airdrops

To get crypto airdrops, there are two fundamental steps:

First, you need to find airdrops.
Then, you need to participate in the airdrops.

How to find airdrops

It’s easy to find crypto airdrops if you know where to look. Here are some simple ways:

Airdrop websites: Check websites like Airdrops.io, Airdrop Alert, or CoinMarketCap Airdrop. These sites list current and upcoming airdrops and explain how to join.
Project websites: Visit the official websites of blockchain projects. They often announce airdrops there, and they also give you the steps you need to take to qualify.
Social media and forums: Follow projects on X, Telegram, and Reddit. These platforms are great for getting the latest updates.
Crypto news platforms: Subscribe to crypto news websites or newsletters. They often report on new airdrops and give advice on how to participate.
YouTube channels: Watch videos about airdrops on YouTube. Many creators share guides and updates about how to join these events.

How to participate in airdrops

Once you find a crypto airdrop you like, here’s how to join:

Set up a wallet. Make sure you have a crypto wallet that works with the token being given out. Exchange wallets often have extra features, but non-custodial wallets (e.g. Metamask) work too.
Check the project. Research the project offering the airdrop. Look at their team, whitepaper, and community reviews to make sure it’s legit and not a scam.
Complete the tasks. Many airdrops ask you to do tasks like follow them on social media, join their Telegram group, or hold specific tokens in your wallet.
Sign up for the airdrop. Projects may ask you to register your wallet address or fill out a form to qualify.
Get your tokens. After finishing the steps, wait for the token distribution date. The tokens will be sent to your wallet. Keep an eye on updates in case more steps are needed.

Risks and challenges explained

The appeal of free tokens can be strong. But it’s equally important to be aware of the potential risks and challenges.

Always be cautious to avoid falling prey to scams and other security threats. Here are some key risks and challenges to watch out for:

Airdrop scams: Be wary of projects that impersonate legitimate ones to steal personal information or funds. Do your research.
Security threats: Legitimate airdrops never require private keys or sensitive information. Be cautious of projects that ask for such details.
Token volatility: Airdropped tokens can be negligible or volatile. They can lose value or liquidity fast.
Tax implications: Airdropped tokens are often considered taxable income at fair market value upon receipt. You need to keep accurate records for reporting.
Temporary community base: Projects may attract users mainly interested in free tokens. They may not care about the project itself, they just want free stuff.

Examples of successful crypto airdrops

Successful crypto airdrops show how these events greatly impact project visibility and token value. Distributing free tokens to users creates a buzz, attracts new users, and rewards loyal community members.

Let’s take a look at some notable examples:

Bitcoin Cash (BCH): In August 2017, Bitcoin Cash was airdropped to Bitcoin holders, which led to significant trading activity and a peak value of almost $4,000.
Stellar (XLM): In 2018, Stellar distributed $125 million worth of XLM to Blockchain Wallet users.
Uniswap (UNI): In September 2020, Uniswap airdropped UNI tokens to 250,000 early platform users. This resulted in a dramatic 160% increase in token value quickly after the airdrop.
Apecoin (APE): Apecoin distributed 10,000 APECoins to holders of Bored Ape NFTs. The project achieved a market cap of $2.4 billion shortly after its launch.
Arbitrum: On March 23, 2023, Arbitrum gave 625,000 users free tokens. The traffic was so high that their website experienced crashes.

It would have been nice to get some of these for free, right?

FAQ

What is an airdrop in crypto?

A crypto airdrop is when blockchain projects give free tokens to users as part of a promotion. These tokens are sent directly to users’ wallets to attract attention and grow the project’s community. It’s a popular marketing method to build a strong base of supporters.

How does crypto airdrop work?

A crypto airdrop works by sending tokens to users who meet specific conditions, such as holding certain coins or completing tasks. It’s an easy way for users to get free tokens while helping projects grow.

How to get airdrop crypto?

To get free airdrop crypto, follow these steps:

Find airdrops on websites like Airdrops.io.
Complete tasks like signing up, following social media, or registering your wallet.
Wait for the tokens to be sent to your wallet on the distribution date.

What is airdrop crypto meaning?

Airdrop crypto refers to the process of giving away free tokens to users as part of a project’s marketing efforts. It helps spread awareness and encourages more people to explore the project.

Bottom line

Hopefully, you now have a good understanding of crypto airdrops. To recap, these promotional strategies let blockchain projects distribute free tokens as a way to boost engagement and visibility.

You can snag these airdrops and enjoy benefits like free tokens and governance rights. Just remember to watch out for scams and assess the risks.