Ethereum Wallet Airdrops: Too much of a good thing?

Angus Cepka
Dec 2, 2017 · 3 min read

Everyone loves free stuff. People go out of their way to take advantage of two-for-one offers, massive discounts and freebies. Wouldn’t it be great if one day your bank deposited money in your account for no reason? Something similar has started to happen in the Ethereum ecosystem. One day when looking at your wallet you might find some surprise tokens waiting for you. This happens as a result of an ‘Airdrop’.

Today I made a token deposit into my Ethereum wallet (Chainlink) and was surprised to find tokens that I did not expect. Not only was my regular supply of Ether in my wallet, but there were also two new airdrops.

What were these two mysterious surprises waiting for me? Why were they there? Before I answer these questions — let’s first explore what an Airdrop is and why someone might do it.

What is an Airdrop?

Airdrops happen when someone will give you free tokens. There are a few reasons why someone may choose to do this.

1) Promotion

Some airdrops are simply given as a promotion and the tokens are worthless. The Cryptonex airdrop was a good example of this. I noticed 1000 cryptonex tokens in my wallet one day and wondered what they were. It turns out that they could be used to receive a ‘discount’ for the ICO of real Cryptonex tokens. My tokens were completely useless.

2) Ecosystem Building

A project may choose to airdrop tokens as an incentive to use their ecosystem. A good example of this is the recent Indorse airdrop. Indorse is a decentralized network for professionals. In order to incentivise people to use the network, they provided every Ethereum address holder with up to two free Indorse tokens.

3) Joke Coins

Some coins are absolutely worthless (see Fuck Token or Useless Ethereum Token as examples). People don’t generally want to pay for these coins (unless they are morons), so they are sometimes offered as airdrops. A good example of this is the recently launched DimonCoin which promises to ‘decentralize FUD’.

Recent Airdrop Examples

I took a look at the two recent airdrops I received.

INS Promo

INS is a project that aims to connect grocery manufacturers directly to consumers. They airdropped each Ethereum wallet with at least 0.1 ETH a total of 777 INSP tokens. These tokens can be used to receive a 5% bonus on tokens purchased during the ICO which begins on Dec 4th. This airdrop certainly was successful is raising project awareness. I had no idea this project existed until I received the airdrop and did some research to find out why it was there.

VIU

VIU is the token for the Viuly video platform. Viuly is a platform like youtube except that it uses the VIU currency to power the platform. Users are rewarded with tokens when they watch advertisements and content creators are paid in the tokens. During the airdrop, each wallet received 20 viu tokens for each ETH in a user’s wallet. This airdrop did drive me to find out what Viuly was, but admittedly I still have no intention of using their platform when Youtube is far surperior.

Conclusion:

Airdrops can be a good way to bring publicity to a project or to incentivise users to use a product. However, with increasing popularity of ICOs as a method to raise funds, there is the danger that everyone’s wallet will become overwhelmed with useless airdropped tokens.

BCW Group

Blockchain Professional Services Company +

Angus Cepka

Written by

Crypto lover and blockchain enthusiast. Interested in ICO investing and crypto-trading strategies. Head of Advisory at BCW Group.

BCW Group

BCW Group

Blockchain Professional Services Company +