What are crypto airdrops? A clear explanation!
Do you want to get hold of crypto coins or tokens, but don't have any money? Then you might consider participating in an airdrop. This is a way in which you can receive crypto coins for free. It's not completely free, though, because you have to do something for it.
In this article, we explain to you what airdrops are, how you can participate in them and what to watch out for.
What is a crypto airdrop?
A crypto airdrop is a way to get free crypto coins and tokens in exchange for performing certain actions. Thus, you have to make a quid pro quo to receive the coins and tokens.
Airdrops are often performed by companies that have only just gotten their crypto project off the ground. In this way they want to generate more attention for their new crypto currency or token, without spending a lot of money.
As mentioned before, you will have to give something in return in order to receive free coins and tokens in an airdrop. This can be the following:
Subscribing to a Telegram channel
Liking or sharing social media pages
Having your identity verified by KYC (Know Your Customer)
Leaving contact details such as your email address
What's the point of an airdrop?
But why would a company give away crypto tokens for free, when it could also sell them? There are several reasons for this. The first reason is that this way the company wants to get more exposure at a low cost.
Giving away their own crypto tokens costs them nothing. In exchange, others will like and share their posts on social media, which will increase their exposure. They do not have to pay advertising costs for this. So it is a cheap way of advertising.
Another reason is that companies want to reward the people who have supported them from the beginning in this way. In this way, the community of the new crypto project becomes much closer, so the company can count on their community in the future. Thus, this can make the company a lot of money in the future.
Also, an airdrop allows the coins to spread faster across the blockchain landscape. This can ultimately help sales take off a lot faster, ultimately benefiting the company from the tokens they gave away for free.
Different types of airdrops
There are different types of airdrops. We distinguish between an automatic airdrop and manual airdrop. Manual airdrops can then be divided into NFT, DeFi, and exclusive airdrops.
With an automatic airdrop, you don't have to take any action yourself to receive crypto coins or tokens. The number of tokens or coins you receive is based on the contents of your current wallet. An automatic airdrop takes place when a hard fork occurs. The best way to explain this is with an example.
When the Bitcoin blockchain was split into Bitcoin (BTC) and Bitcoin Cash (BCH), all users who had BTC in their wallet received the same number of BCH coins. For this, they did not have to do anything.
We talk about a manual airdrop when you first have to perform an action to get coins or tokens. In most cases, you have to perform actions on social media so that the project gets more exposure. For most companies, that is the most formal goal of an airdrop.
There are then three different types of manual airdrops:
- NFT airdrops: when you participate in these, you get non-fungible tokens (NFTs) as a reward. These are unique tokens that you can distinguish from each other because they have a unique code, for example.
- DeFi airdrops: the tokens you receive in a DeFi airdrop can be used for that company's DeFi system. Think of decentralized applications (dApps) running on Ethereum's blockchain.
- Exclusive airdrops: the tokens you can get from an exclusive airdrop are often worth a lot of money. For example, in 2020, UniSwap gave 2500 UNI tokens to their most loyal users. At the time, this was worth about 1,200 US dollars.
How can I participate in an airdrop?
First you will have to search for an airdrop before you can participate. There are several websites where all kinds of airdrops are posted. Through Google you will quickly find such websites.
Then you can choose an airdrop of your choice on this website. The website will tell you what you need to do to receive free coins or tokens, after which you can register.
They will also ask for your wallet address so they can send coins or tokens to it. Make sure you only send your public key and not your private key. The latter is only for you, and you should never share it with others.
Can you make a lot of money with an airdrop?
It is certainly possible to make money with an airdrop. But can you make a lot of money with an airdrop? That depends on the airdrop. With some airdrops you can earn a few cents, while with another airdrop it is possible to earn much more.
Due to the difference in the various airdrops, it is difficult to determine exactly how much money you can earn. In most cases, you can't make an immediate monthly income from it.
However, the value of the coins you get for free may increase in the future. By saving these coins for the long term, you could make a lot of money later on with airdrops.
An airdrop is free, and therefore in most cases there is no harm in joining in. However, there are also a number of situations that you should be careful of.
Watch out for this when participating in an airdrop
Taking part in an airdrop seems harmless, but can sometimes be very dangerous. There are always people who try to take advantage of others. Therefore, it is important to pay attention to the following:
- Never give your private key to others.
- If you have to register yourself somewhere, never use the same password you use for other accounts.
- Don't just download any file from the Internet.
- Airdrops are free, so never pay money for an airdrop.
There are many stories about scams with airdrops. If you do not trust it, it is better to skip the airdrop and join another one. After all, there are more than enough airdrops out there.
You don't necessarily have to own a large amount of money to get crypto coins and tokens. It is also possible to receive them for free. This can be done by participating in a crypto airdrop.
When you participate in an airdrop, you will have to perform a quid pro quo to receive free crypto. In most cases, you will have to sign up somewhere and share the crypto project on your social media pages.
Since an airdrop is free, there is often no harm in participating in it. However, beware of the risks. If you don't trust it, it is better to skip the airdrop in question and look for a reliable airdrop.