What is a Crypto Airdrop? Here’s Everything You Need To Know – CoinGape

• By Dhirendra Kumar
• Updated on December 31, 2022

Cryptocurrency airdrops simply mean the distribution of free crypto tokens to individuals who have shown an early interest in cryptocurrency projects, decentralised applications (DApps), or the services of a new blockchain.

What is a Crypto Airdrop?

Airdrops are marketing initiatives in which blockchain-based organisations and developers distribute free tokens to members of their communities (that is, users that often engage with new and emerging crypto platforms).

This is analogous to receiving a free discount card in the mail to encourage you to visit a new store in the neighborhood. However, the goal of a crypto airdrop is to raise awareness for new projects and services rather than to persuade the receiver to spend money.

The fundamental concept is to transfer newly created tokens to hundreds or thousands of different wallet addresses in the hopes that receivers will be more likely to take part in the project.

Why Crypto Airdrop Exists?

The core objective of a crypto airdrop is to promote a blockchain company, project, or service.

Once the token begins trading on an exchange, holders are encouraged to raise awareness and promote the project to reach a wider audience. The higher the interest in the token, the more likely it is to appreciate in value.

A crypto airdrop is typically offered to users in exchange for performing certain minor tasks. These tasks usually include things like: following a social media account, retweeting or sharing one of their posts, including hashtags, making a transaction (using a particular crypto platform or wallet), creating an account and signing up for services or updates

There are also times when a crypto airdrop is delivered to users without their having to do anything.

Also Read: What Are Multi-Signature Wallets? Here’s What You Need to Know

How Can I Receive Crypto Airdrops?

There are various websites or Twitter accounts that post about upcoming crypto airdrops. Following such sources is a reliable method of learning about ongoing and upcoming airdrops. This also allows you to research the project before signing up for the airdrop.

The procedure for receiving the airdrop is typically simple. When you sign up for a drop, you provide your wallet address as well as any additional details. If you are chosen by the project to receive the tokens, the funds are instantly transferred to your wallet without you having to accept them.

Also Read: Explained: How To Secure Your Crypto Wallet?