Crypto Airdrop: What is Airdrop in Web3 and How does it work?
In this article, we observe Airdrops in web3, definition, pros and cons, types, some examples, and websites where users can find them.
In the context of blockchain technology and cryptocurrency, an Airdrop refers to the distribution of tokens or coins to a large number of wallet addresses for free. Airdrops are often used as a marketing strategy to increase the awareness and adoption of a particular blockchain project or token.
Projects may use Airdrops to reward their existing users or to attract new users to their platform.
Airdrops can be used to incentivize users to perform certain actions, such as following a project on social media, reposting updates or contributing to the project in some way. Another reason is decentralization — the more projects are centralized, the more their fate depends on several big coin or token holders, which is negatively considered by the Web3 community. Thus, Airdrops may boost building a strong community of users around the project, which can be valuable for its long-term success.
On the other hand, if a project’s tokenomics and marketing strategy are poorly designed, Airdrops can be a double-edged sword. Projects may create short-term hype around the project and its token’s price growth, but increase of tokens in circulation may potentially lead to the price decrease in the long-term. Also, projects may suffer from fraudsters who create hundreds of robots (fake accounts in social networks) and participate in dozens of Airdrops every day to increase their chances of winning tokens. In the 8.Finance project we created a solution for this issue: a “Snake for Crypto” game, where projects may run Airdrops and get only live users, because participants should play the game and improve their characters to increase chances of winning in the Airdrops.
Users may be interested in participating in Airdrops for a number of reasons.
One reason is the potential to receive free tokens or coins, which may have value in the future if the project is successful. Additionally, participating in Airdrops may allow users to learn more about new projects and technologies in the blockchain space.
There are both pros and cons for users to participate in Airdrops.
Some potential pros include the opportunity to receive free tokens, the opportunity to learn about new projects, and the potential to benefit from the success of the project in the future. However, there are also risks involved in participating in Airdrops. For example, the project may not be successful, or the tokens received may not have any value. It’s important for users to do their own research and carefully consider the risks before participating in an Airdrop.
Different types of Airdrops
1. Token, coin, or NFT Airdrops: This is the most common type of Airdrop, where a new cryptocurrency project distributes tokens, coins, or NFTs to a large number of wallet addresses for free. The goal is usually to drive adoption of the new cryptocurrency and increase the user base
2. Bounty Airdrops: A bounty Airdrop is where you can earn tokens (coins, NFTs) by completing certain tasks or contributing to the project in some way. This might include things like following social networks, bug hunting, or translation work. It may be even something unusual like Airdrops of the DEX’s tokens to it users with the highest trading volumes
3. Referral Airdrops: Some projects may offer a referral Airdrop, where you can earn rewards by inviting other people to join the project
Sometimes in Bounty and Referral Airdrops projects reward only a certain number of users who complete more tasks or invite more friends. Sometimes they implement a lottery mechanism where users complete tasks and only some of them are randomly rewarded. But the more tasks completed (analogy with a lottery — you get a ticket for completing each task), the higher probability of becoming a winner
4. Dividend Airdrops: Some cryptocurrency projects may distribute a portion of their profits to token holders in the form of a dividend. This is known as a dividend Airdrop
5. Hardfork Airdrops: A hardfork is a change to the protocol of a blockchain that is not backwards-compatible. When a hardfork occurs, a new cryptocurrency is created from the old one. If you hold the old cryptocurrency, you may be eligible to receive an Airdrop of the new cryptocurrency in a 1:1 ratio
1. Scams and Phishing Attacks: One of the biggest risks is the possibility of falling victim to a scam. There have been instances of fraudulent Airdrops where the perpetrators ask for personal information or private keys, which they can then use to steal funds. Or they can ask you to connect your Web3 wallet and then they may just steal all of your assets — never connect your wallet and provide any information until doing your due diligence and only participate in Airdrops from reputable projects
2. Dusting attacks: A dusting attack is a type of malicious activity where an attacker sends a small amount of cryptocurrency (known as “dust”) to a large number of addresses, including yours. The goal is to trace the transactions and deanonymize users on the blockchain. While the amount of dust is usually not enough to be of any value, it can still be a privacy concern
3. Unclear terms and conditions: It’s important to carefully read and understand the terms and conditions of an Airdrop before participating. Some Airdrops may have restrictions or requirements that you need to be aware of
4. Time consumption: Projects may ask you to take many tasks that consume much time to complete. Always evaluate whether the time you have to spend is worth the potential profit
5. Regulatory risks: Cryptocurrencies and Airdrops may be subject to varying degrees of regulation depending on your jurisdiction. It’s important to be aware of any relevant laws, taxes and regulations that may affect your participation in Airdrops.
Overall, the best way to minimize these risks is to do your due diligence and only participate in Airdrops from reputable projects. Be cautious of any Airdrop that asks for personal information, connecting your wallet, private keys, and always verify the authenticity of websites and emails before interacting with them.
How to participate in Web3 Airdrops?
Here are the steps you can follow to participate in a web3 Airdrop:
1. Find an Airdrop: There are several websites and social media groups that list ongoing Airdrops. You can also keep an eye on the official channels of cryptocurrency projects you are interested in, as they may announce Airdrops through their website or social media. List of some websites with Airdrops:
CoinMarketCap — https://coinmarketcap.com/Airdrop/
DappRadar — https://dappradar.com/hub/Airdrops
Airdrops.io — https://Airdrops.io/
Airdropbob — https://www.Airdropbob.com/
AirdropAlert — https://Airdropalert.com/
2. Verify the authenticity of the Airdrop: It’s important to be cautious of scams and only participate in Airdrops from reputable projects. Do your due diligence and research the project before participating
3. Follow the instructions: Each Airdrop will have its own set of instructions on how to participate. This might include things like following the project on social media, joining a Telegram group, or providing your email address. Make sure to carefully read and follow the instructions to ensure that you are eligible for the Airdrop
4. Provide your wallet address: You will generally need to provide a compatible wallet address in order to receive tokens, coins, or NFTs. Make sure to use a wallet that supports the type of cryptocurrency being airdropped (e.g., Solana and BNB Chain addresses are different).
Airdrops are a good way for users to get free or almost free crypto assets (tokens, coins, NFTs) and a good way for crypto projects to attract attention and increase brand awareness. Some examples of successful Airdrops are Bitcoin and Ethereum (yes, they were airdropped at the beginning of their development), Stellar and dydx — these Airdrops created hype, increased number of people who learned about the projects and became interested in their future and price, began to tell their friends about them. Maybe if it weren’t for the Airdrops, the masses would never have heard about these projects.
8.Finance is an educational and marketing platform that is revolutionizing the way users take their first steps in web3. And projects attract new users and increase their brand awareness by running events for users, including Airdrops.
Our platform features a simple and fun “Snake for Crypto” game that helps educate users about web3 and guide them through the process of participating in the events of our partners: Airdrops, tournaments, educational videos with quizzes and rewards. This gamified approach makes it easy for anyone, regardless of their level of knowledge or experience, to get involved in web3. And best of all, our platform is completely free for users, so there are no costs, risks or barriers to entry.
8.Finance team is raising funds now. By supporting the development of our platform, you can help drive the growth and adoption of web3 technologies. This is a unique opportunity to not only invest in a promising project, but also to play a role in making web3 accessible and approachable for everyone.
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Kudos to chat.openai.com that generated most of this article’s text.