What is Airdrop? Why is it done? How to Win?

Airdrop is a term used in the world of cryptocurrency and blockchain technology. The process of distributing a cryptocurrency for free is called an airdrop. In this article, we will discuss the term airdrop in detail with questions such as what is airdrop, why airdrop is done.

What is Airdrop?

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An airdrop is a free gift of any cryptocurrency to users. On the other hand, it can be said that there is a marketing method in the cryptocurrency world. The organization that will carry out the airdrop event sends the cryptocurrency to be gifted to the users’ wallet free of charge.

The airdrop is carried out by the project team. Usually, in order to participate in an airdrop event, users are expected to fulfill certain conditions or requirements. Users who meet these expectations are rewarded with free token distribution.

Nowadays, users show great interest in airdrop events. Because the coins distributed in the airdrop event are both free and always have the potential to rise. Project owners are generally welcoming to airdrop events. They think it would be efficient to organize an airdrop event to get their name out there.

Why Airdrop?

There are multiple reasons behind airdrops. But the main reason for this practice is to raise awareness and attention for a new cryptocurrency. In particular, the number of cryptocurrencies on the market has surpassed 10,000. With new projects emerging all the time, organizing an airdrop is a good option to differentiate from competing projects.

If we take a more comprehensive look at the reasons behind why projects want to carry out airdrops, we see the following headings.

Building Community:

Airdrop events are an effective way to grow a project’s community. Free token distribution increases the interest of new users in the project and increases the number of community members. Building community is important for the long-term success of the project. Because a strong community supports the project to reach more users and investors as it develops and spreads.

Raising Awareness:

Positive attention to the project is important for potential investors. This can contribute to the growth and development of the project.

Attracting Investors:

Coins distributed through a project’s airdrop event can have a certain value and use within the project’s own economy. These coins can be distributed to reward investors and users who contribute to the project. Also, airdrop events can provide an opportunity for investors to take a closer look at the project and make a decision to invest in the future.

Incentivizing Users:

Airdrop events can be organized to encourage users to try a new platform. Users can receive free tokens in exchange for completing certain tasks of the project or using certain features of the platform. This way, users can better understand the potential of the project by experiencing it and using the tokens.

In addition, it should be noted that the airdrop also helps to acquire the highly valuable database. In some airdrop events, participants may be asked to fill out several online forms. For example, the Universa.io airdrop event required participants to provide their Facebook list to win the airdrop. The information obtained from these forms requested from Airdrop participants may be used in future marketing activities of the project.

It is worth reminding that airdrop participants should be wary of fraudulent activities. Airdrop events can be organized through fake sites and the data shared with the other party, including personal information, can be processed for malicious purposes. Therefore, airdrop participants should make sure that they only provide information to the official website of the respective project.

Why Participate in an Airdrop Event?

The cryptocurrency world relies heavily on excitement . People are always looking for the next exciting thing in their lives. Airdrop events also create excitement for people. Thefeeling of winning something already carries a sense of excitement in itself. For this reason, there is interest in the airdrop event, mainly to experience the feeling of winning and to earn free coins. If we take a closer look at why people are participating in the airdrop event, we can list some of the following reasons.

Interest and Curiosity:

The world of cryptocurrency is growing rapidly. Many people enjoy exploring new possibilities and experiencing new projects in this field. Airdrop events allow people to access and try out different tokens for free.

Chance to Win a Prize:

Airdrop events distribute free coins or tokens to participants. Some airdrop events can be quite valuable. Users who participate in such events get a chance to win prizes.

Investment Opportunity:

The tokens distributed during an airdrop are usually tokens from projects that have not yet been released or have just been released. Airdrop participants have the opportunity to own these tokens at an early stage and invest early in projects with potential for future growth.

How to Announce an Airdrop Event?

Announcing the airdrop event is an important step to attract potential investors and community members of the project. Here are common ways to announce an airdrop event:

Website and Blogs:

The project’s official website and blog is the ideal place to announce the details of the airdrop event and the terms of participation.

Social Media:

The project’s own social media channels or social media platforms that support the project are an effective tool for publicizing the airdrop event. Project, Twitter, Telegram, Instagram, etc. be active on other social media channels and share posts encouraging participation in the airdrop event.

Crypto Content Platforms

Content platforms frequently used by the cryptocurrency community can be used to announce an airdrop event. Medium, Reddit, etc. platforms or forum sites can help the project’s airdrop announcement reach a wide audience.

Email Newsletters:

Sending information about the airdrop event to users who subscribe to the project’s email newsletter can be an effective way to encourage participation and keep them updated.

Influencer and Partner Studies:

You can work with people or organizations that are influential in the cryptocurrency space and have a voice in the community to publicize the project’s airdrop event to a wide audience. It may also be useful for the project to collaborate with other crypto projects and communities to jointly announce the airdrop event.

Crypto News Sites:

Submitting a press release or article about the airdrop event to popular crypto news sites can help publicize the event widely.

There are obviously many channels to announce the airdrop event. It is almost impossible for people interested in the cryptocurrency space not to be found on any of these channels. That’s why it’s important for projects to use as many channels as possible when organizing an airdrop event to reach everyone.

What Are Airdrop Types?

In order to participate in airdrop events, projects may request different actions from users. Let’s take a look at some of the different types of airdrops:

Standard Airdrop:

This type of airdrop requires signing up for a newsletter or various updates. Registration with just name and e-mail address is enough to participate in the airdrop event.

Bounty Airdrop:

The most common activity in this type of airdrop is tweeting about the project, etc. situations. If the tasks requested in this regard are fulfilled, participation in the airdrop event can be achieved.

Holder Airdrop:

In this type of airdrop, users are expected to hold certain cryptocurrencies in their wallets. If the requested request is fulfilled, participants can earn free cryptocurrency from the airdrop event in exchange for their action.

Hardfork Airdrop:

A hardfork airdrop is a type of airdrop that occurs when a cryptocurrency project leaves its existing blockchain and creates a new blockchain and token set. In this process, the existing blockchain and the newly created blockchain are separated and represent two separate projects with the same history. A hardfork airdrop is a method where the tokens of the new project resulting from this separation are distributed free of charge to the token holders of the existing project. For example, during a hardfork, Bitcoin holders were given the opportunity to receive Bitcoin Cash based on the amount of Bitcoin in their wallets.

Special Airdrop:

This type of airdrop is reserved for a specific community only. The role of a specific project, website, club, etc. in the development of a particular project, website, club, etc. Suppose you are a VIP member of the areas. This can qualify you to participate in special airdrop events that not everyone else will know about. As the name suggests, this airdrop is reserved for a specific community only.

How to Participate in Airdrop Events?

Participating in airdrop events involves several processes and steps. Typically, this process is similar in many airdrop events. The requirements to participate in the airdrop events are as follows.

  • Search for credible projects
  • Understand the requirements and conditions of participation
  • Registration
  • Determination of wallet address
  • Completion of tasks
  • Confirmation of participation

After the completion of this process, participation in the airdrop event will be ensured

Are There Risks to the Airdrop Event?

Airdrops are attractive to participants because they are free of charge and the cryptocurrency being distributed has the potential to reach high values. This attractive offer will encourage many participants to sign up for the airdrop event. It is also important to take into account the investors who will be interested and invest in the coin through the airdrop. At this point, scammers who want to turn this situation into an opportunity may come into play. The risks that await the airdrop participants and those who will invest in the project are as follows.

Forgery

Airdrop sites can commit fraud by asking users for private information or asking them to pay in advance. This is why it is important for users to only participate in airdrop events of trusted and verified projects.

Low Value Cryptocurrencies:

Tokens distributed through airdrop events are often undervalued. Therefore, the tokens that users obtain may not be worth much or users may have liquidity problems in the market.

Volatility Associated with Important News:

Some airdrop events link projects to important news. This can cause significant fluctuations in the token value. Users should be careful about the token value during the airdrop and research the project carefully before investing.

Confidentiality:

Airdrop events may require participants to provide personal information. This can result in users’ privacy being compromised and being exposed to spam or other unwanted messages.

Valid Token Address and Wallet Issue:

It is important that the airdrop tokens are correctly sent to the valid wallet address or account of the participants. There is a risk of entering a wrong address, in which case tokens can be permanently lost.

Pumping

Projects can gather many investors through different communication channels. Once the relevant token is listed on exchanges, project developers can sell all tokens for a quick profit. After such a development, the developers may abandon the project and it may cease to function.

An example of the risk involved in airdrop events is the EDOGE event. To breathe new life into Dogecoin, developers created Ether Doge (EDOGE) on the Ethereum blockchain. The developers held an airdrop event of 5 million EDOGE tokens. As soon as the tokens reached the exchanges, around October 24, 2017, they abandoned all their tokens. The developers disappeared and the project fell silent.

Here’s what can be done to avoid airdrop risks:

  • Carefully research the airdrop events to participate in.
  • Those who will be sharing personal information at any stage and those who will be making payments for any reason should proceed with caution.
  • Airdrop events usually do not ask for personal information or payment. Caution should be exercised against such attempts.
  • Make sure that the website to be interacted with is the official channel of the project. The reputation of the project should be assessed through forums and social media channels.
  • The authentication process must be completed to avoid fake accounts and bots.
  • Ensure that the correct wallet address is provided to receive the tokens to be distributed.

In order to avoid such situations, you should first take a look at the project’s website and investigate the team members. It is useful to check what they have done in the past and how their previous projects have progressed. After that, the technical reviews need to be read. It needs to be seen what the project does and whether it adds real value to the ecosystem.

Who Organized the First Airdrop Event?

The first airdrop in blockchain history was realized by Auroracoin. Auroracoin has emerged as a cryptocurrency for Iceland. Auroracoin distributed tokens to Icelandic citizens in March 2014. In this event, known as the first airdrop in history, 50%of Auroracoin was distributed to the citizens of the country. Persons with permanent residence in Iceland are entitled to 31.8 AUR each.

Since the 2008 economic crisis, Icelanders have been looking for a way out of the Icelandic krona. “Auroracoin came about in 2014 with a new idea to replace the Icelandic krona with a cryptocurrency,” Hlynur Þór Björnsson, a board member of the Aurora Foundation, told Cointelegraph.

Cryptocurrency was seen as an opportunity for Icelanders to free themselves from currency controls and government devaluation of the currency. Auroracoin was designed to change the traditional fiat currency financial system in the country. The best solution to distribute this cryptocurrency to Icelandic citizens seemed to be an airdrop.

After the distribution of Auroracoin to Icelandic citizens via airdrop, devaluation took place within a few months. Auroracoin lost over 50%of its value in a few days after the airdrop event. Auroracoin, referred to as Iceland’s coin, failed, losing its entire market capitalization in as little as 6 months.

What is the Difference Between Airdrop and ICO?

Airdrop events and ICO (Initial Coin Offering) can be confused with each other. ICO, which translates into Turkish as ‘Initial Coin Offering ‘, is a pre-sale event. The main purpose of an ICO is to finance a cryptocurrency project that is preparing to be launched. Participation in ICO events is paid . By participating in ICO events, investors have the chance to invest in cryptocurrencies that could do well in the future before they are even launched.

On the other hand, airdrop events are a marketing method where participation is free of charge. Participants receive the coins of the relevant project for free and can earn from the coins. As such, airdrop events can also increase ICO participation. This can make the launch of a new token or coin much more powerful.

To summarize, airdrop events are held to market cryptocurrency projects, and users earn from these events through free coins distributed for free. This is a win-win situation for both project owners and users. However, it’s important not to forget about scammers who will try to take advantage of investors and airdrop participants.