Airdrops in cryptocurrencies work just like discount coupons you may have often received in your inbox from some e-commerce platforms. The discount coupons aim to entice you into visiting the online store of the platform. Developers of new blockchain-based projects adopt a similar approach, luring users to their platform by sending them free tokens.
Airdrops are part of a broader marketing strategy with the underlying hope that more users will be drawn to the project – even if all they do is cash out the free tokens. Airdrops serve as an effective alternative for a fair distribution of tokens since some countries have banned initial coin offerings, an unregulated way to raise funding for crypto projects.
However, there is one difference between discount coupons and airdrops -- the objective. While discount coupons encourage you to make purchases, airdrops strive to create more awareness about the project.
For participation, users are invariably asked to complete tasks like following a social media handle, re-sharing a social media post, signing up to the network, etc. Token recipients are also incentivised to spread awareness among other people, as it translates into price appreciation.
Free tokens, attractive incentives and just the general excitement of being involved in the launch of a project; what’s not to love about airdrops? However, before you go looking for airdrops to sign-up for, you need to know how to spot the right ones. It will ensure you don’t waste your time on a dead-end project or, worse still, lose your money to a crypto scam.
Identifying a legitimate airdrop:
First things first - you want to look for relatively newer projects as the older ones can no longer offer airdrops. This can be a little tricky. You need to follow social media handles, discord events and reliable crypto websites to spot lesser-known events around the world. When you find an airdrop that seems worthwhile, you must dive into the details to determine whether the project is credible or not. Here are some platforms that can help you out with that information:
What you will need to participate in an airdrop:
While airdrops distribute crypto tokens for free, there are some prerequisites that must be fulfilled. Here’s what you need:
1. Crypto Wallet:
Privately owned digital wallets are highly recommended as you do not want to let a third party manage or handle your cryptocurrency. Your exchange wallet does not count as the private key is unknown to you. A wallet that is in your control is the safest bet. Since most new tokens are Ethereum-based (ERC-20 standards), an Ethereum-supported wallet would be ideal. In this regard, MetaMask is believed to be one of the best options.
You can also have a cold wallet (external drives), which is the most secure method of storing cryptocurrency as it is not connected to the network 24x7. Some options in this category are Trezor, Nano Ledger and Keepkey.
2. Valid e-mail address:
Most airdrops require an e-mail address to create an account with the network and apply for a whitelist. An e-mail ID is also required to create an account with the exchange. Therefore, a good tip here is to have a separate e-mail address just to keep applying for airdrops.
3. Social media handles:
Since a lot of airdrops require users to re-share project posts on their respective social media profiles, participants must have valid handles on the most popularly used platforms, such as Twitter, Instagram, and Facebook.
4. Adhere to deadlines:
Once you have ticked the above three boxes, you can head to the official blockchain website that specifies the eligibility criteria for participation in the airdrop. Every airdrop has different requirements based on the developers’ objective. You must go through the details and then proceed to carry out the respective activities.
Registrations for the whitelist of an airdrop usually have a strict deadline. Therefore, you must make sure that you complete the mandatory tasks and the application process well within time.
How can you participate in an airdrop?
There are four types of airdrops, and they all function a little differently. Each of them has a different list of checkboxes that you need to tick-off to participate in the airdrop event. We’ve detailed all four of them below to give you a better idea:
1. Standard Airdrop: To qualify for these airdrops, all you need to do is sign-up for the project’s newsletter with your name and e-mail address.
2. Holder Airdrop: These airdrops function a little differently. Besides possibly singing up for the newsletter, you also need to hold a minimum amount of specific cryptocurrency in your wallet.
Coins will then be airdropped to you based on the amount in your wallet and the distribution ratio decided by the developers. For example, the upcoming PulseChain airdrop requires participants to hold Ether or ERC-20 tokens in non-custodian crypto wallets. These are individually owned wallets, unlike the ones on exchanges.
3. Bounty Airdrop: To qualify for these airdrops, you need to complete certain social media actions such as post sharing, tagging, referring, etc. You will be rewarded a set number of tokens for each activity completed.
4. Exclusive Airdrop: These airdrops are usually held by social media accounts or websites with a massive following. If you’re a site member or a follower, you become entitled to participate in the airdrop. An example of such a website would be Airdrop.io.
Since requirements are not the same for all airdrops, there is no one-size-fits-all solution. You must follow what the official website directs you to do in order to become a participant.
It is worth bearing in mind that many rug-pulls and other scams have been taking place in the world of crypto. Therefore, you must never share your private key or personal details and remember to exercise due caution when signing up for an airdrop. Do your homework and make sure that you know the fundamentals of the airdrop you are participating in and its native cryptocurrency.