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Airdrops Guide FOR beginners
An airdrop is an event where a DeFi project or protocol distributes cryptocurrency assets to a specific group of users within the project's community. These assets are usually native to the project and can have varying values, ranging from a few cents to thousands of dollars, depending on the level of hype and publicity surrounding the project.
Airdrops can be conducted in two ways:
• Assets are transferred directly into users' wallets
• Users can claim their airdrop by visiting the project's website
When an airdrop is announced, the project usually discloses the eligibility criteria. In this article, we will share some tips to help you when farming airdrops in DeFi.
✅ Crypto airdrops refer to the process where crypto token creators distribute their tokens to wallet addresses free of charge.
These airdrops usually serve as a marketing strategy, intending to spread awareness about a new cryptocurrency or to reward loyal customers. The received tokens can be a boon to your crypto portfolio as they can be traded or held as investments.
The developers of a new cryptocurrency may do an airdrop, a giveaway, of their new coin in order to hype it and generate more interest and excitement around it. You may have to do a few things to have the potential of receiving new coins, such as follow the crypto project on social media, track it on a Discord channel or otherwise support the project.
Another popular airdrop was the ENS Token airdrop to any user that held an ENS Domain on or before October 31st, 2021. While ENS domains (better known as .eth domains) only cost around $50, the token airdropped gifted early adopters over $10,000 in ENS governance tokens. Users then had the choice to keep these tokens and participate in governance or sell these tokens for a profit.
🔹️Types of Crypto Airdrops
Understanding the different types of crypto airdrops can help users identify the ones most relevant to them. Generally, we can categorize airdrops into four distinct types:
Standard Airdrops: In standard airdrops, tokens are distributed to users who hold a specific cryptocurrency. The basis for such airdrops is typically the blockchain the new token is built on.
For instance, if a new token is built on the Ethereum blockchain, the token's creators may decide to airdrop tokens to all users who currently hold Ethereum in their wallets.
These airdrops usually serve as a marketing strategy, intending to spread awareness about a new cryptocurrency or to reward loyal customers. The received tokens can be a boon to your crypto portfolio as they can be traded or held as investments.
Holder Airdrops: This type of airdrop is a reward system for holders of a certain coin. Companies will select a particular cryptocurrency, and all holders of that cryptocurrency will receive an airdrop, regardless of the platform.
The airdrop serves as an incentive for users to hold onto their coins, thereby maintaining or even increasing their value.
Bounty Airdrops: These airdrops are designed to reward users for completing specific tasks. These tasks could range from sharing a social media post, writing a blog article, referring a friend, or even fixing bugs in the project's software. Upon successful completion, the user receives the tokens as a bounty reward.
How to Participate in Airdrops ⁉️
Most airdrops require little effort to participate. Here are some general steps:
Stay Updated: Follow your favorite crypto companies on social media, subscribe to their newsletters, and join their communities to stay updated about potential airdrops.
Hold Cryptocurrencies: Holding a diverse range of cryptocurrencies can make you eligible for more airdrops.
Complete Tasks: Some airdrops require users to complete specific tasks like sharing posts on social media or referring friends.
Check Status - Once you completed all the steps included in the participation process, check the Airdrop leaderboard status.
What to Do After Receiving an Airdrop?
After you've received an airdrop, you have several options:
Hold: You can hold onto the tokens and hope their value increases over time.
Trade: You can trade the tokens on a cryptocurrency exchange.
Research: Conduct in depth research about the token. You might decide it's worth investing more into the token, or you may choose to sell.
🔹️Successful Airdrop in Crypto History
Over the years, several crypto airdrops have made headlines for their unprecedented success. Here is a noteworthy one:
Uniswap (UNI): In 2020, Uniswap launched its native token, UNI, and decided to airdrop 400 UNI to every wallet that had used its decentralized exchange service.
At the time, the airdrop was worth around $1200, but the value of UNI has since skyrocketed, making this airdrop one of the most lucrative in crypto history.
