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A Beginner’s Guide to Crypto Airdrops

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A Beginner's Guide to Crypto Airdrops

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It might interest you to know that the history of crypto airdrop dates back to March 2014 when the anonymous creator (s) of “Auroracoin” distributed 50% of the coin’s total supply to Icelanders. Thus, airdrops are not novel in the crypto space and neither will it fade anytime soon. 

In actual fact, as long as we have cryptocurrencies in existence, there will always be one airdrop or the other. Having known this, you should be very interested in understanding how airdrops work and how you can profit from them while staying safe.

Just to tell you how profitable crypto airdrops can be; In January 2016, what many consider to be the biggest and most profitable airdrop so far occurred when the mining-related project Minereum, airdropped 32,000 MNE to every of its eligible early adopters. Surprisingly, these airdropped tokens later amounted to $440,000. 

What are Airdrops?

The term airdrop refers to the issuance of a certain cryptocurrency to a certain number of qualified wallet addresses (users) for free but upon completion of certain tasks or by virtue of holding a certain other cryptocurrency. On a lighter note, we can say that airdrops are a form of crypto giveaways and/or freebies. 

Crypto airdrops

Now, follow this little illustration to further understand the concept of cryptocurrency airdrops:

A certain crypto start-up like HaggleX emerges for example and it says; we will be giving out 50 HAG tokens for free to persons who complete certain stated tasks within a specified period of time. Interested persons then perform these tasks, submit their wallet addresses and upon validation, their respective 50 HAG tokens are being sent. Interesting, right?

So, for you who do not have sufficient capital to venture into cryptocurrency trading, why not begin airdrop hunting and you’d be shocked by how much free money you could be lucky to make.

Not to worry, as we progress, we will discuss in details the requirements for airdrops, how to participate in airdrops and what airdrop tasks entail.

Why Crypto Airdrops? 

I hope you did not just conclude that these crypto start-ups give out these free tokens with no special motive(s). 

For the records, there are numerous reasons behind crypto projects airdropping their tokens and some of them include;

  • Marketing and Awareness: Particularly, crypto start-ups resort to token airdrops as a means of announcing their project’s arrival as well as to advertise their brand.
  • Wide-spread Token Circulation: The growth of a cryptocurrency could be limited or stunted, if only few hands hold a larger chunk of the token’s circulating supply. Owing to this, some projects engage in airdrop campaigns so as to distribute their tokens across numerous wallets.  
  • Community Building: One tasking and crucial thing for crypto projects is the community factor. A project thrives more when it has a solid group of persons that believe in it as well as promote it. For this reason, start-ups engage in airdrop activities.
  • Reward Plan: Airdrops are also being done as a way of rewarding early adopters of a certain crypto project. Similarly, some wallets are usually being airdropped new tokens by virtue of holding a certain other cryptocurrency.  

Types of Cryptocurrency Airdrops

It is of necessity that you know the various kinds of crypto airdrops as it will enable you position yourself towards winning them.

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  • Bounty Airdrops: In this type of airdrop, users are being rewarded with tokens after they must have completed required tasks. Some of these tasks usually include; writing of blog posts, social media (Facebook, Twitter, Instagram, LinkedIn, BitcoinTalk) tasks like retweeting, liking and sharing of posts. Bounty airdrops usually span for a specific period of time and there is usually a reward pool from which every participant gets to share from.
  • Holder Airdrops: This is by far the easiest type of airdrop. As the name implies, this type of airdrop occurs when a user receives a new token by virtue of simply holding another cryptocurrency in his/her wallet.
  • Standard Airdrops: Here, you are only required to fill in your details in a simple online form but upon completion of some tasks. Oftentimes, this airdrop tasks only involves; following the project on social media, liking and retweeting a post(s). 
  • Retroactive Airdrops: This is an event in which tokens are being issued out to early adopters and/or users of a certain crypto project (most times, these projects are decentralized exchanges)

This retroactive airdrop first occurred in September 2017 when Uniswap airdropped 15% of the UNI total supply to wallets (users) that interacted with its decentralized exchange in the early days of the project. 

Similarly, both 1NCH and dYdX decentralized exchanges joined the retroactive program where 1INCH distributed over 15,000,000 tokens while dYdX issued out 75,000,000 tokens. 

However, the most recent retroactive airdrop just happened as ParaSwap gave out 7.5% of its PSP token supply to eligible early adopters/ users.   

How to Participate in Airdrops

Well, I’d say that participating in airdrops isn’t a very big deal. In fact, it is as simple as ABC. 

Crypto airdrops

For every bounty and standard airdrop campaign, there is always a unique set of rules. So, all you need do is play by the rules and you could end up being among the winners. 

Participating in retroactive airdrops means you should try to interact with newly launched decentralized exchanges that “you trust” and you could be among the winners of the next big retro-airdrop. 

For holders airdrop, the principle is quite clear. All you need do is keep your ears to the ground and be on alert. 

What are Airdrop Requirements?

Below are common prerequisites for participating in any airdrop campaign;

  • You must have the following social media accounts: Twitter, Telegram, Discord, Reddit, Youtube and others
  • You must have several cryptocurrency wallets like Solana, Algorand, Ethereum, Binance Smart Chain (BSC) and the likes. Meanwhile, take cognizance of the fact that exchange wallet addresses are not accepted in airdrops. So, you should have a web wallet or a Mobile App Wallet if you really want to receive airdrops. 
  • Lastly, you must act like a human being; don’t be a bot.

How to Avoid Airdrop Scams 

Ever since the advent of airdrops in 2014, there have been numerous airdrop campaigns as it has proven to be one of the best and easiest marketing strategies for cryptocurrency startups. Equally, a good number have come to be interested in airdrops due to its history of giving many mouthwatering gains, while some have made airdrop hunting a business. 

However, there is a need to be very watchful when participating in some airdrops as scammers have slowly crawled into the system. This is to say that, not all airdrops are legit; some are scams and/or dumb airdrops. Below are some helpful airdrop guides;

  • Have an Airdrop Wallet: Oftentimes, some airdrops do require participants to connect their wallet to a certain DEX in order to perform some tasks. On this note, it is advisable not to use your main crypto wallet while indulging in order to be on the safe side. You don’t want to risk your private keys or, do you? This implies that you should have a separate wallet for airdrops. 
  • Don’t Pay to Receive Airdrops: Nobody ever pays to receive an airdrop; don’t fall a victim. Airdrops are free and should be given for free. So, whenever you come across any airdrop that asks for a certain fee, that’s enough for a red flag – run!
  • Research: The only way to spot a dumb airdrop is by doing your own research. Before jumping to fill that airdrop form, kindly do yourself the favour of checking out the project’s team, whitepaper and socials.  
  • Watch out for the pre-sale tactics: This is another method used by scammers in stealing people’s money in the guise of issuing airdrops. It is best to keep your guard high whenever you participate in an airdrop and suddenly participants are asked to join a pre-sale before the airdrop as it could go both ways. 

Final Thoughts

It is worthy of note that while some airdrops could always grow into huge amount of profits; some could end up in the mud especially where there is no strong community and development team. Hence, it is of utmost importance that you know when to take profits and when to HODL your airdrop tokens. 

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