Crypto Airdrops: How to Earn Tokens Without Risking Any Money
A whopping 6000 new crypto projects were added to the market in 2021, which means that new players have to develop exciting gimmicks and investor benefits to gain traction at the start, including play-to-earn metaverses and crypto lotteries. Airdrops are a tool that crypto developers use to make new cryptocurrencies an exciting investment.
Airdrops are promotional giveaways to reward investors or players, usually free tokens or coins. They may require that participants commit to specific tasks, like promoting the service or platform on social media. Because cryptocurrency creators are responsible for their marketing and distribution, airdrops are a great way of generating free promotion and publicity.
If you aren't sure what an airdrop is or how it works, this guide will help you get started.
What Are Airdrops?
Airdrops are a promotional marketing activity followed by block-chained services, usually when new coins or tokens are introduced to the market. The platform announces a currency giveaway to early users when a new coin launches. To take advantage of the offer, users have to act as an exchange, which means they may be expected to include account registration or share a social media post with their followers.
Everyone who completes the tasks will become an eligible participant of the airdrop. On the day of the airdrop, the platform will transfer the promised amount of its currency to the public wallets of a few lucky winners. In most cases, participants aren't guaranteed an airdrop because they draw vast numbers each time.
Different Types of Airdrops
The concept of an airdrop is relatively standard across most crypto platforms, but there are a few subtle differences in how airdrops are executed, including:
Small amounts of cryptocurrencies are transferred at no cost to a public wallet user during a standard airdrop. The wallet address must be sufficient for standard airdrops and the new cryptocurrency. These are often given out as gifts for registering on a new platform.
Bounty airdrops work slightly differently. The bounty airdrop is usually issued in exchange for promotional activities, including social media promotion or blog posts.
Exclusive airdrops target existing users and crypto veterans by offering rewards. It's often seen when exchanges or other crypto platforms issue their own coin/token for the first time to their already-established user base.
Holder airdrops target wallet users that hold a specific currency in their wallets. These are often seen with more mainstream, popular cryptocurrencies like Ether and Bitcoin.
How Do You Receive an Airdrop?
Participants must have a wallet that accepts and stores various cryptocurrencies to receive an airdrop because an airdrop requires a cryptocurrency transfer. You will be required to supply the wallet address when you register for the airdrop.
If you are successful, you will receive a transfer with the promised cryptocurrency in that wallet on a set date. You may need to own a wallet based on the blockchain used for the service, e.g., a wallet designed for and built on the Ethereum blockchain (like MyEtherWallet) or Stellar-based tokens (like StellerPort).
Always check which blockchain the platform is built on if you want to be part of its airdrop.
The Benefits of Airdrops
Airdrops help crypto start-ups stand out from the crowd. Cryptocurrencies are valued according to the amount of people trading and holding the currency; distributing your coins or tokens to a broader user base helps your currency gain momentum and attention from new investors.
As a crypto investor, you can get started with a new crypto coin at its inception without spending any money. It's often beneficial to get started with cryptocurrencies at the beginning of their journey. As the volume of transactions grows and more holders are added, the coin gains value and continued momentum.
Are Airdrops Safe?
Airdrops can be used as a ruse for fraud, and users have to be careful before handing over their wallet details. After Metamask announced its intention to conduct an airdrop, hackers sent several malicious tokens to random wallet owners. When crypto owners researched these tokens, they found that malicious phishing sites had stolen their information.
Airdrops are often used in "rug-pull" scams. Unscrupulous scammers will sometimes create a token and promote its crypto airdrops aggressively through social media channel spamming.
The token's price becomes inflated through a coordinated effort from various malicious hackers and investors dogpiling on the stock because it seems to be climbing dramatically in volume. Then, when the value hits a specific number, the scammers liquidate their shares or swap the currency for a different one, causing the value to drop. Investors lose money and are left with nothing but worthless tokens.
Before participating in an airdrop, ensure the platform and currency are legitimate. A red flag should go up if the company is spamming the Twittersphere with links and promotions for its airdrop. Before participating, check if the currency has audit reports and listings on reputable sites. Be aware if the promised airdrop amount is unusually high.
Finding Legitimate Airdrops
New coin discovery, voting, and auditing platform Coinscope offer access to legitimate airdrops from audited new currencies. With Coinscope, the community can view all active airdrops that new cryptocurrencies have issued, as well as upcoming airdrops and completed airdrops.
Coinscope also acts as an audit platform and issues comprehensive and unbiased audit reports for new coins as they are issued, allowing you to make up your mind about whether or not to invest. It's the safest way of finding and participating in airdrops and discovering new coins (before everyone else does).