What is Airdrop and how many forms of Airdrop Crypto exist? Discover the limitations and effective instructions on how to execute an airdrop coin here! When entering the Crypto world, few individuals are “here for tech”, rather, most people are looking to make money. The market offers many ways to profit, ranging from simple to difficult, and from one ecosystem to another. This article will delve deeper into a method that everyone enjoys yet not everyone is prepared to act upon – Airdrop.
What is Airdrop Crypto?
Airdrop is a commonly implemented marketing tactic utilized by startup projects in the cryptocurrency field. Its main objective is to promote the project and attract a larger audience of traders when the project’s token is listed for an Initial Coin Offering on an exchange platform. Typically, there are two popular methods of airdropping that projects often employ, which are gifting tokens or Non-Fungible Tokens from the project
In order to fulfill the eligibility criteria for receiving an airdrop, users may be required to hold a minimum amount of tokens in their wallet. Additionally, they may need to complete specific tasks such as sharing project-related posts on forums and social media, connecting with a particular member of the blockchain project or writing blog articles related to the project. These measures are intended to increase user engagement and promote awareness of the project.
Compare Airdrop with Bounty
There exists a common misconception among numerous individuals regarding the differentiation between Airdrop and Bounty. The distinction between the two remains indistinct, and clarification must be sought in order to draw a clear demarcation between them. Nonetheless, a rudimentary comprehension could be construed as follows:
- Bounty is where we do something to make money.
- Airdrop is an amount of money that suddenly “falls” into your pocket.
Specifically, the term “Bounty” refers to the act of “hunting for reward”, wherein we are required to perform tasks requested by the project, in exchange for which the project will award a certain amount of money (or tokens) for our efforts. These tasks typically involve searching for bugs, participating in drawing contests, creating content, and so on.
With regards to Airdrop, it is an experience in which we approach a project with the perspective of “hoping for luck” that the project will have a reward plan for early adopters. Consequently, it is nearly impossible to ascertain whether there is truly an Airdrop associated with the project.
The various forms of Airdrop in cryptocurrency
Based on the data collected, Crypto currently possesses the following methods for receiving Airdrops:
A retroactive airdrop of coins is a form of project reward offered to users who have previously demonstrated support, utilization, or contribution towards the development of a product. These airdrops are typically distributed as tokens of the project in question.
This form of token distribution became popular when Uniswap launched their Airdrop UNI campaign, in which they distributed tokens to users who had previously interacted with their project. This campaign coincided with the initial listing of UNI on Binance, where it was valued at approximately $3-4 per token. This meant that a single wallet receiving these tokens would have been worth around $1,600.
Subsequently, 1Inch conducted two rounds of airdrop coin distribution for users who had previously engaged in trading or provided liquidity to the project. Participants were awarded approximately 600 1INCH tokens in each round, which had a value of roughly $1,700 and $2,400 respectively.
The objective of this approach is to ensure accurate distribution of tokens to genuine users, given that these tokens serve primarily for administrative purposes. By limiting the allocation to actual users, the likelihood is high that they will retain and contribute to the development of the project.
Hold & Stake coin
The term “Token coin” referred to in this context may comprise of either the Native token of various Blockchains or the tokens in the background that the Airdop projects are constructed upon. With this mechanism, users are not required to undertake any action but to possess valid tokens to qualify for Airdrop.
Some cases that can be mentioned are:
- LUNA: Those who hold LUNA and Stake will receive Airdrop coming from newly developed projects in the Terra ecosystem. However, Terra suffered a collapse in May 2022 due to the UST peg loss debacle.
- CRV: A more precise token known as veCRV is created by locking CRV, as detailed in the workings of Curve. Users possessing veCRV will receive EPS, Ellipsi’s token, which is a fork of Curve, as well as support from Curve.
- SNX: In the future, users who stake SNX on Synthetix will receive Airdrops for construction projects. The initial three projects are named Lyra, Thales, and Aelin.
It is evident from the past that there have been instances of Airdropping tokens to holders for cryptocurrencies such as BTC and TRX. However, recently this trend has re-emerged with an advanced version wherein one must Stake to receive the Airdrop.
This approach aids in reducing the circulation of tokens held by their owners, resulting in a more favorable price fluctuation. In addition, if applied to a native blockchain token, it enhances the security measures.
Do the quests
Besides the aforementioned methods, there are additional means for individuals to participate in obtaining coins/tokens from corresponding projects
- Answer the question: The standout sources in this field are Coinmarketcap and 247btc.net, which have published articles under the series “Making Money with CoinMarketCap”, providing step-by-step guidance on participation and consistently supplying answers for their audience.
- Participate in competitions: Participating in various competitions such as the top trading volume on different exchanges can also result in receiving an Airdrop. For instance, the Infinity Race competition, organized by Coin98, with a total prize of $50,000 worth of C98 tokens, attracted more than 4,500 participants trading on the Coin98 Exchange.
- Fill out the form: This method has been widely implemented in multiple projects with widespread participation due to its simplicity, involving filling out a form and waiting for the outcome. For instance, the Solstarter’s airdrop SOS is a great example of this approach.
Although running nodes for blockchains is not a novel practice in the world of crypto, it is gaining more attention in 2022 due to the downtrend making it difficult to generate profits through trading.
Although running a node does not guarantee winning an airdrop, there are numerous projects that offer generous rewards for those who participate in running nodes beforehand. An exemplar project for this in 2022 is Aptos.
Disadvantages of Airdrop Coin
Although Airdrop Coin is considered as one of the nearly “sure win” methods of earning money, meaning that individuals do not lose any money, it cannot be denied that there are certain drawbacks associated with it.
- Time: It is undeniable that most Airdrop forms mandate user experience of the product, which primarily necessitates the expenditure of a certain amount of time to explore all features. For individuals with busy schedules or a lack of genuine interest in Skin in the game, these tasks may prove to be unfavorable.
- Transparent: Due to the distribution of tokens for free, and the lack of means to verify team activity, it is possible that the project may not truly adhere to the initial guidelines for distribution. It should be noted that this is a mere speculation from the author who has never been successful in any Whitelist project. This statement is presented in a formal tone and informative style.
- Not of great value: Certain projects confirm the provision of Airdrop coins/tokens for specific activities, which results in a significant number of users participating, not to mention each individual using multiple wallets. Consequently, the number of tokens per wallet will be reduced, thus resulting in a lower amount of revenue meant for users holding fewer wallets.
- Cheat: Since this is one of the popular ways to make money, one may encounter the risk of losing their money unfairly. For instance, falling into the trap of a scam link that requires providing personal information such as Private Key/Passphrase. Therefore, it is imperative for individuals to exercise caution and pay close attention to the links they intend to click on.
Naturally, there may be additional limitations to consider. Would anyone like to propose any potential limitations in the comments section below, so that we may engage in further discussion on this topic?
Instructions for making Airdrop Coin effectively
Depending on the specific topic, we must adequately prepare accordingly. However, in most cases, it is necessary for us to possess a Multi-chain wallet, which means having a wallet for any given chain, along with a small amount of coin for that particular blockchain to cover transaction fees. If we are working on a Testnet, we will also require the coin for the Testnet network, such as ETH on Kovan or Rinkeby. Moreover, basic knowledge on how to utilize DeFi products is essential.
Look for information
If you have perused the foregoing section, it is discernible that the information can be classified into two categories: confirmed and unconfirmed.
- The confirmation implies that the project has issued an Airdrop announcement for eligible users and allotted a specific time-frame to fulfill the conditions. However, the value of the Airdrop is generally low as it is widely participated in.
- The act of searching for projects without tokens and participating in their trial periods with the hope of receiving an Airdrop is a strategy that is yet to be confirmed. This approach is known to yield high profits due to the scarce number of individuals engaged in such activities. However, its downside is the difficulty of identifying these projects.
This step necessitates utilizing the final “preparation” section above: Knowledge. It is imperative that you possess fundamental knowledge about the nature of a project in a certain area, such as the fact that a Lending project involves lending and borrowing, while a DEX project entails swapping and providing liquidity.
Once fully informed, it is recommended to complete all tasks and objectives supplied by the project. In certain instances, the project may provide instructional articles on how to best navigate the user experience.
Wait for results
Just like in the section on Information Collection, if we already have information beforehand, we should wait until the day of results announcement to determine whether we have won or not.
In the event that no official announcement has been made, or at the very least the token launch has not commenced, it is imperative that we wait. Should there still be no indication of any update, it is indicative that we have potentially misidentified the project at hand. It is therefore recommended to exercise caution during this period of uncertainty.
Tips to make Airdrop Coin
I will categorize into two types based on capital. Of course, there is no condition for determining whether it is a small or large capital, as it is entirely up to an individual’s discretion.
Executing an Airdrop campaign with limited capital allocation
If you find yourself in this situation, it will require considerable time and effort to effectively utilize certain products. While some projects have easily navigable modes of interaction, such as AMM which only requires swapping or providing liquidity, others like Lending protocol are more intricate, necessitating multiple button presses as well as a testnet amount specific to the network.
The statement that “it’s not worth the effort” is not accurate. Perpetual Protocol once organized a “long-short” testnet competition, in which users could request a small amount of ETH testnet, draw charts, and place orders. The competition had a total of 200 winning slots, with the lowest prize being 100 PERP. As of now, 100 PERP is equivalent to $1,000.
Additionally, individuals will gain the genuine experience of DeFi, familiarizing themselves with the buying and selling process on AMM, dealing with Slippage, high gas fees, and occasional liquidations on lending platforms. This is a unique experience not known by all, but it will provide us with valuable insights when participating in mainnet products with real assets.
Do an Airdrop with a lot of capital
In my opinion, individuals with significant financial resources are likely to experience time constraints that render the process of engaging in testnet activities exceedingly difficult, as the outcome of such endeavors cannot be guaranteed. However, if one desires to obtain Airdrop, it is suggested that they adopt the strategy of Holding and Staking tokens, for the following reasons:
- Due to the fact that the majority of coins/tokens are associated with prominent projects, it can be deemed that they serve as investment assets.
- Due to the nature of these large-scale projects, they are expected to attract a multitude of smaller projects, thereby resulting in a significant increase of Airdrop activities.
- While the rewards cannot be expected to hold a high value, the profits yielded from exceptional project success would be considerable.
As previously mentioned, publicly available Airdrops typically have minimal value assigned to each wallet. To amass a substantial quantity requires a sizeable investment or a desirable market position through the acquisition of a large number of tokens or through the purchase of average capitalization.
The popularity of Airdrop Coin is on the rise as it is an effective marketing strategy for distributing tokens, despite the aforementioned drawbacks. It remains to be seen whether there will be additional forms of Airdrop in the future. This query awaits an answer from the future.
The above information was researched by the team at 247btc.net. We hope that this information will be helpful to our readers. However, please note that this is not investment advice, but rather an informational channel. Therefore, investment decisions should be carefully considered.
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