A cryptocurrency airdrop is a marketing strategy that involves the distribution (dropping) of a portion of the total digital currency or token by an issuer or project to wallets for free. The purpose of the airdrop is usually to market or spread awareness of the project and/or decentralize the holder base by increasing the number of people that own the token. However, because the goal is marketing, the project team typically uses some criteria that fits their target market and their market goals. These criteria can be used to group airdrops.
Classes of Airdrop
- Retroactive airdrops: are airdrops to wallets based on prior action(s) such as having interacted with the product, helping the product or generally being an early adopter/supporter. Examples include UNISWAP’s airdrop of UNI tokens to early adopters, liquidity providers etc.
- Takeover airdrops: Due to the open source nature of blockchain projects, it is easy to mimic and launch an existing project under a new name. However, it is not as easy to get users and has seen new projects resorting to airdropping their tokens to wallets that have interacted with a popular and similar product to lure users to the newer project. This is referred to as takeover airdrops. E.g., SUSHISWAP’s airdrop of (SUSHI) to UNISWAP users.
- Token/NFT holders airdrop occurs when a project airdrops its token to any wallet that holds a specific token or NFT e.g., BitTorrent’s (BTT) airdrop to TRON holders, Apecoin airdrop to BAYC NFT holders.
- Bounty airdrops: It involves airdropping tokens to wallets of individuals that participate in some activities ranging from marketing activities e.g., following social media handles, retweeting a tweet, etc. to testing the product etc. Often, due to the high participation, the project team may resort to a raffle, random selection etc. for picking winners or condition it to the highest number of referrers etc.
- Forking Airdrops: These occur when a blockchain splits into two. Often, the tokens of the new blockchain are airdropped to all wallets in the older blockchain. Probably the most popular one is Bitcoin Cash (BCH) token to all bitcoin wallets at the chain forking. A similar but different type of airdrop are those sent to every wallet on a blockchain such as Stellar Lumens (XLM) airdrop to all bitcoin wallets.
A successful airdrop is a win for all parties, the project gets awareness at little to no cost, recipients get free tokens. Some airdrops have brought projects to popular knowledge and use as well as net recipients thousands of dollars. However, fraudsters have also been active in it from dusting attacks (asking people to send small amounts to claim tokens that will never be sent), wallets hacks etc. To participate in airdrops, you can follow and interact with new projects, hope to be lucky with some retroactive or holder airdrop, use dedicated airdrop listing websites which have varying degrees of trust. However, don’t expect a big break from airdrops as there is a lot of competition.
Fun fact: Some people almost entirely focus on getting airdrops and even have communities around airdrops alone. These people are known as airdrop hunters.