25.09.2021 Crypto Basics

What is an AirDrop?

An AirDrop is a bounty or incentive, or reward program to promote crypto projects in the community by dropping free tokens or coins into users’ wallets. They are an effective marketing strategy for start-ups to create awareness about their project before investment rounds. 

Projects reward users with new coins or tokens for free for doing simple activities, such as following social media, liking a page, or joining Telegram. Rewards are distributed in the form of a lottery. The majority of tokens are transferred in equal quantity to each AirDrop participant. 

Reward pools make up anywhere between 500K USD to 10M USD. No company has ever given any form of value to the general public for free except for crypto projects. Crypto tech start-ups engage in AirDrop and Bounty programs, where the former happens before the investment rounds, and the latter occurs straight after.

The most common Airdrops are: 

Automatic – distribution to holders of specific cryptocurrency or wallets of specific blockchains

Stimulating – distribution to users in exchange for a project promoting on the net.

How to participate in AirDrop?

Many aggregators, such as airdropalert.com and coinmarketcal.com, exist on the market, where you can find all ongoing AirDrops in one spot. Project socials and Bitcointalk, Reddit, Twitter are also good places to find them by searching the phrase airdrop. You must have a digital wallet, preferably one that supports multiple coins and tokens, to receive the AirDrop. 

Once you locate an active and qualifying airdrop of a specific project, visit the airdrop page. Before you click on claim airdrop, you must meet the requirements listed, such as following the project on social media. Next, connect your wallet to receive the reward. 

You must research the project before you participate in its bounty program. Some projects are malicious, and they use airdrops to attack your wallets and eventually steal your funds. Therefore, you should use a wallet with zero funds and is designated to receive airdrops only to mitigate risk. 

Many emerging projects build on existing blockchains, such as the Binance smart chain and Etheruem. Therefore, tokens in the form of airdrops are stored on these blockchains accordingly. 

You must select a wallet that supports the airdrop tokens. For example, one can use Metamask for the Etheruem blockchain and trust wallet for the Binance blockchain. Trust wallets support multiple base cryptocurrencies such as Binance, Etheruem, EOS, and others. 

New projects either build their own blockchain and issue coins or build on a base or an existing blockchain and issue tokens. So, you must select the correct wallet that supports the blockchain where tokens are issued.

Conclusion 

Airdrops allow projects to spread awareness among the crypto community and the general public. It creates a risk-free opportunity for users to participate in the project early on with low risk and potentially high reward. 

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