LLTS 21 — The World of Crypto Airdrops

This article will walk you through what crypto airdrops are, the types of airdrops, how crypto airdrop work if crypto airdrops are secure and the pros and cons of crypto airdrops.

What are Crypto Airdrops?

In a bitcoin airdrop, tokens or coins are given to wallet addresses as marketing. Small amounts of the new virtual money are given out or exchanged for a small favor, like retweeting a message from the company that created it and deposited to the wallets of engaged blockchain community members. The ultimate goal of a crypto airdrop is to increase public knowledge and the use of a particular token or currency. AuroraCoin holds the credit for being the first crypto airdrop on March 25, 2014, in Iceland.

Types of Crypto Airdrops

1. Standard Airdrop

In a standard cryptocurrency airdrop, participants interested in receiving an airdrop indicate their readiness to do so. They are required to provide a valid wallet address to acquire it. These are simple to use; however, since there is no limit to how many wallets one may make and the number of standard tokens per individual is limited, it might be hard to obtain them.

2. Bounty Airdrop

When users achieve specific requirements, they receive reward airdrops. Rewards involve receiving referral incentives for bringing in new users, such as new subscribers, in addition to benefits for participating in social media and promoting projects. Users can engage in the “airdrop,” where they can exchange the previously mentioned currencies for goods by earning points for specific tasks.

3. Holder Airdrop

What differentiates Holder Airdrop from other airdrops is that these take place automatically according to who and how many token holders there are. Since all blockchain users have total transparency, holder airdrops have the drawback that token holders may not want an airdrop. On the other hand, holder airdrops ensure that only the most significant invested users profit.

4. Exclusive Airdrop

This type of airdrop is frequently provided to a small group of individuals. Exclusive airdrop users are picked based on extra quantitative factors, such as the number of social media postings, the length of time, and the amount of money invested in the project, as contrasted to Holder airdrop users. Furthermore, this raises the possibility of rewarding people most valuable to the project.

5. Raffle Airdrop

This particular kind of airdrop is a combination of all the other ones. Raffle Airdrop means that may it be the interests of the users, the social media interaction, or even earning coins, as mentioned before, they all have a chance at being rewarded by the Raffle Airdrop. Since this means that the users are outnumbered, the winners are then randomly selected.

So How Do Airdrops Work?

The technique gets started when the project decides that an airdrop is necessary. It is crucial first to determine who the airdrop’s intended receivers are. After that, a public campaign is launched in which prospective consumers collect data, and a snapshot is taken to specify the terms and prerequisites for the airdrops. Prices of currencies or tokens change in response to snapshot times, and any transactions that take place after the snapshot have no impact on the outcome of the airdrop. Thus, the users are identified. The users are therefore recognized. Once the list of receivers has been established, smart contracts are frequently utilized to facilitate airdrops, and the transaction block is typically made public to demonstrate the airdrop’s equity. According to the type of airdrop, these users receive coins or tokens. As a result, users can now add the token to their wallets.

But Is It Safe and Secure?

Where legit crypto airdrops are only rewarded for promotional purposes, sometimes scams occur. Since most of these airdrop scam direct users into linking their wallets, scammers may gain access to these wallets. Moreover, some airdrop scams might require users to purchase, for example, NFTs to be rewarded by an airdrop and to hold these NFTs to get a higher price on it, which would benefit the project. For this purpose, users must do their research and have ample knowledge before they invest in a project. Users must also prevent visiting websites that direct them anywhere other than the project’s domain. They can also create a separate wallet only for airdrops, reducing the overall risk.

Pros and Cons of Airdrops

Pros

• Means of rewarding stakeholders of a project.
• Promotion of the project due to increased awareness.
• Having users that are more sustainable in adapting to new tokens.

Cons

• Airdrop Scams enable scammers to get access to wallets.
• People having different preferences for token distribution may not be satisfied.
• Tokens might flop due to low liquidity on the exchange.

Conclusion

Projects may use crypto airdrops to raise awareness for their tokens/coins and make their security highly liquid. The users also may utilize these tokens as rewards while ensuring to refrain from falling prey to scammers.

Disclaimer: The “Let’s Learn Together Series” by “Zignaly” is part of Zignaly’s commitment to giving back to the community. Through its directives, team Zignaly strives hard to help benefit society, helping them learn and remain on par. These articles are shared for informational and educational purposes only and do not create any directive for trade.

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