What is a Crypto Airdrop?
A crypto airdrop is a promotional event used by blockchain start-ups to increase hype or awareness of a new blockchain project by distributing a specific token or coin to its users for free. It is a marketing initiative that incentivizes token holders to engage more with the project, increase the overall token supply, and become active participants in the community. While crypto airdrops are mostly given out for free, some airdrops ask their participants to perform specific tasks before they can claim their tokens.
Types of Crypto Airdrops
Crypto airdrops can be classified into three broad categories:
Exclusive airdrops select specific individuals based on their association with the project, such as active community forum posters. The purpose is to reward participants based on their loyalty and past connection with the project.
Bounty airdrops are not free. For bounty airdrops, participants have to complete some tasks related to the project, such as creating and sharing posts on the project’s social media handles, participating in forums, tagging friends on Instagram, etc. After completion of the task, participants fill out a form along with their wallet address to claim the “bounty” and receive the airdrop.
It is a type of cryptocurrency airdrop that is based on a snapshot of the blockchain ledger at a specific block height or date. In a holder airdrop, cryptocurrency holders who have a certain minimum balance of a particular token in their wallets at the time of the snapshot are eligible to receive a distribution of a new token, usually for free.
How Can I Tell if an Airdrop is Fake?
Crypto airdrops seem appealing, but unfortunately, there are ways to scam unsuspecting crypto enthusiasts with fake airdrops.
Here are some useful tips you can use to avoid airdrop scams:
- Before providing your crypto wallet address for the airdrop, double-check whether the project or start-up is using its official website.
- Never share your private keys, seed phrases, or passwords online.
- Legit start-ups usually do not ask for any registration fees to qualify for airdrops.
- Beware of the rug-pull scam. Many scammers will artificially pump up their project tokens to increase their value temporarily.
- Remember that it’s a scam if the project promises an exorbitantly high number of airdrops.