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What are Crypto Airdrops?
What are Crypto Airdrops?

Learn about what crypto airdrops are and how they work.

Updated over a week ago

Airdrop campaigns have become a big part of crypto. But what exactly are they, and why do they get so much attention?

In short, airdrops involve crypto projects sending their tokens en masse to their early adopters or loyal users.

The primary goal of a crypto airdrop is to drive early adoption and usage whilst growing a larger community and boosting engagement. The goals differ according to what sort of crypto project it is. For example, a new crypto wallet will host a crypto airdrop to increase active users and brand advocates, whilst a DeFi protocol will airdrop tokens to active community members to help drive value and usage.

By distributing newly minted tokens to thousands of different wallet addresses, the hope is that it will grow the community, both during and after the airdrop campaign.

How do crypto airdrops work?

Crypto airdrops work a little like a loyalty points program run by a brand, where each purchase brings customers points that then translate to discounts or additional items. In a crypto airdrop, however, what is often rewarded by points is users’ participation and activity in using the platform or wallet. These can include:

  • Following an official account on social media

  • Sharing or retweeting their posts

  • Buying, swapping, sending, or receiving crypto on their platform

  • Completing Daily Quests

By doing these actions, a user or wallet will accrue points that will then be used to work out how much they receive of the overall crypto airdrop.

Why do crypto airdrops exist?

The main reason is to promote and drive new users to a crypto platform or service. Crypto airdrops equally benefit early adopters as well as new projects, meaning you can earn cryptocurrency whilst just using or advocating for a product or service.

It also allows a fairer distribution of funds by rewarding those who use the product or platform the most and engage with it most on social media platforms. A direct example of this is how Brave browser rewards people for how much they browse via Brave by airdropping $BAT tokens every month to its users. This means frequent users of Brave browser are rewarded the most, offering a direct reward incentive.

Before, companies and tech providers farmed early user data to grow their platform, to their benefit but not the early adopters. However, with crypto airdrops, early adopters are now financially rewarded with a native token or a non-fungible token (NFT), meaning their early usage and advocacy are rewarded.

Different types of crypto airdrops

Cryptocurrency airdrops come in various forms, each with its unique approach, strategy and purpose. Below are some of the different types of airdrops commonly seen in the crypto world:

Standard Airdrops

These are the most common crypto airdrops, which typically require users to sign up or register to a platform or service. Often it works as a first-come, first-served system where all it requires is to sign up. The process might also involve providing an email address or joining a social media group.

It is mostly done for promotional purposes like increasing awareness and building a community around the new cryptocurrency.

Here, they often distribute only a set amount of tokens and might also have a limit on the number of tokens each individual can receive. As a result, standard airdrops are often time-sensitive. Some projects also incorporate a draw in the process to ensure that tokens are distributed fairly.

Bounty Airdrops

In a bounty airdrop, participants are required to perform specific tasks to qualify for free tokens. These tasks can include social media activities (like retweeting an X post), core actions on the platform (swapping two cryptos), or other activities in crypto (buying into a presale or using a DEX). It's a more active form of engagement compared to standard airdrops, with the tasks taking more work and effort.

Holder Airdrops

This type of airdrop targets existing holders of a particular cryptocurrency. For example, if you hold a certain amount of Crypto A in your wallet, you automatically qualify to receive a proportionate amount of the new Crypto B. This method is often used when a new token is being launched on an existing blockchain.

However, a downside of holder airdrops is users get the tokens irrespective of whether they want them or not. To alleviate this issue, holder airdrops often ensure that only the largest, most invested individuals receive the airdrop. Sometimes, the chunk is also pro-rated according to the number of tokens held by the user.

Exclusive Airdrops

These are targeted at a specific group of users, often as a reward for loyalty or early adoption. For instance, a project might airdrop tokens to its early supporters or to users who participated in a beta test.

Raffle Airdrops

Participants enter a kind of lottery or raffle to receive the airdrop. Not everyone who enters will receive the free tokens; instead, recipients are chosen randomly from the pool of entrants.

Forked Airdrops

When a blockchain undergoes a 'fork', which is a significant modification or upgrade, new tokens may be created. In such cases, holders of the original blockchain's token might receive an equivalent amount of the new tokens. A famous example is the creation of Bitcoin Cash from Bitcoin.

Similar to these are the hard fork airdrops, which occur when a blockchain splits into two separate chains. Users holding tokens on the original chain may receive new tokens on the new chain.

Major past crypto airdrops

Several major cryptocurrency airdrops have occurred in the past, each notable for different reasons such as their scale, impact, or the prominence of the issuing project.

One of the largest and most impactful airdrops has been the one that happened as a result ​​of a Bitcoin hard fork which introduced Bitcoin Cash in August 2017. The airdrop was significant because everyone who held Bitcoin ($BTC) at the time of the fork automatically received an equivalent amount of Bitcoin Cash ($BCH).

In September 2020, Uniswap, a popular decentralised trading protocol, airdropped 400 $UNI tokens to each wallet that had interacted with their platform before a certain date. The move provided an immediate value to the $UNI tokens, which managed to gather much worth right after the airdrop.

Decentralised exchange aggregator 1inch Exchange did a similar airdrop in late 2020, where it gave its governance token, $1INCH, to early adopters and participants who had used its platform.

Later in 2021, OpenDAO airdropped its native $SOS tokens to give back to the NFT community. This airdrop was unique because it targeted users of the OpenSea platform, the largest NFT marketplace. Anyone who had bought, sold, or traded NFTs on this platform before a certain date was eligible to claim $SOS tokens.

The amount of $SOS tokens each user could claim was based on their level of activity on OpenSea. The process was designed to be straightforward to encourage widespread participation. The move helped OpenDAO grow its Twitter following to over 60,000 as more than 120,000 addresses claimed the token.

These airdrops were significant in the crypto world for various reasons, including their scale, the value of the tokens, and the impact they had on the respective communities and the broader cryptocurrency market. Each airdrop had its unique approach and objectives, reflecting the diverse strategies and philosophies within the crypto ecosystem.

Since then, crypto airdrops have become frequent and widespread, and some crypto traders predominantly seek out crypto airdrops as a way of making money.

Wrapping up, and the upcoming Best Airdrop

Crypto airdrops have become an integral tool used by crypto startups to help grow their project and their user base. It offers a fair, symbiotic relationship with the early adopters – by using a product early, you help the team and developers behind it fix bugs, learn about user behaviour, and much more, whilst being financially rewarded for this.

The future $BEST airdrop will do exactly this. By using Best Wallet, connecting and engaging with the Best socials, and completing certain tasks and actions, users can earn points which will be attributed to their Best Wallet.

At the end of the Best Airdrop Campaign, participants will receive the Best native token, $BEST, the amount of which will be directly proportional to how many points they accrued. By holding $BEST tokens, you will also gain exclusive benefits whilst using Best Wallet.

Whilst the $BEST airdrop has not yet begun, it is tipped to begin in the second half of 2024, meaning you will soon be able to earn whilst using Best Wallet.

To keep up to date with the upcoming Best Airdrop campaign, follow the Best Wallet socials.

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