What are crypto airdrops?

Imagine waking up one day and finding free tokens in your crypto wallet.

It may sound too good to be true, but it’s actually more common than you think. This is called a crypto airdrop, a popular marketing technique that involves sending (or “dropping”) tokens to a wallet address to promote awareness of a new cryptocurrency and get more people trading it when it lists on an exchange as an initial coin offering (ICO).

Airdrops are popular because they provide simple and low-cost advertising. They’re also beneficial to users, simply because it is seen as free money. Likewise, if the token’s value increases over time or surges drastically, this could result in immense profits at zero capital.

How to earn crypto airdrops

In order to take part in airdrops and earn tokens, you’ll need these three things – a cryptocurrency wallet, base tokens and access to information.

The majority of crypto projects are created on top of - or forked off from - base tokens such as EOS (EOS), Ether (ETH) and Bitcoin (BTC). Therefore, base tokens are required if you want to participate in an airdrop.

It’s also important to have a valid email address and certain social media accounts. This is because most airdrops require you to sign up or apply for the whitelist via email. On the other hand, some will ask you to promote their project on your social media profiles. Once these actions are completed, you’ll be rewarded with airdropped tokens.

But where can you find these projects in the first place? According to Blockgeeks, the best way to find airdrops is by following relevant Twitter accounts, joining certain Telegram groups and using online services (e.g., Airdrop Addict and ICO Drops), which notify you of any upcoming projects.

What are the different types of airdrops?

  • Standard airdrop – anyone is eligible for a standard airdrop. All you need to do is sign up for an account with the new project and provide your wallet address during distribution. Standard airdrops involve rewarding users with tokens when certain tasks are completed, such as signing up for a newsletter.

  • Bounty airdrop – in order to receive tokens through a bounty airdrop, you’ll need to engage in some promotional activity. This includes promoting the project on social media platforms (e.g. Facebook and Twitter), signing up for the project’s newsletter and joining a forum to discuss the project.

  • Exclusive airdrop – this type of airdrop is specifically reserved for followers of a particular cryptocurrency or blockchain community. Unlike a standard or bounty airdrop, exclusive airdrops are usually given out without any action needed.

Take the Uniswap exchange for instance. In September 2020, the platform distributed 2,500 of its UNI tokens to its loyal users, worth $1,200 at the time.

  • Holder airdrop – holder airdrops are usually given to users who already hold certain tokens. In some cases, Ethereum community members have been offered free tokens from a new project that was created on the blockchain.

  • Hard fork airdrop – not a typical airdrop. A hard fork is a change in the blockchain’s protocol, causing it to split into two separate networks. The original network and its coin will continue with the old rules, while the new network and token will follow the new and upgraded protocol. When this split happens, users who held the original token will be given an equal amount of the new token. You can find out more about blockchain forks here.

How to look out for airdrop scams

Crypto airdrops are a great way for a project to promote new tokens and for users to grow their portfolio. However, it has also become a gateway for scammers to phish for personal information.

This type of scam typically involves minting a fake token and sending it to users. They attract users by showing an impressive USD exchange rate, incentivising them to exchange or transact the token. But in reality, the fake tokens have no value and cannot be exchanged or transacted.

The user is then directed to the scam’s website, where they are asked to connect their wallet in order to gain approval to exchange the token. It’s been reported that users are either exposed to a high fee in order to gain this approval, or will have their funds stolen once they connect their wallet to the fraudulent website.

So, how can you avoid this? Like all scams out there, it’s important to do your own research on the project and make sure not to give away any personal information. This includes your private key, as this will immediately give scammers access to your funds. Legitimate airdrops are free, so will never request this information.

You can also test the waters by attempting to exchange the token you’ve been given. If you find that you’re unable to do this, it’s very likely to be scam. You can also check the liquidity and market cap of the token through trusted tracking websites such as Good Crypto and PooCoin.

Please note that Wirex does not participate in crypto airdrops. If you receive an airdrop of free WXT tokens in your wallet, this is a scam. Your safety and security are important to us, so please keep this in mind to avoid being targeted by fraudsters.

6 Likes

Whats your biggest airdrop ?

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Hmm , i this were i started XD

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Thanks wirex for this wonderful post. Kinda had a craze last year with participating in airdrops, in which 90 percent I participated are scams😢. But research always help, only participating on legit airdrops now like on wirex!

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Bare with is wirex will give you new life :heart:

I was lucky with few airdrops. 1000 STX, 4 LPT, 208 XLM

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Haven’t got nothing worth a brag yet, but I know that people who stay active on hunt get rewarded quite generously! :sun_with_face: