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What are crypto airdrops and how to get them?

Though Initial Coin Offerings are the main way through which the digital tokens of a blockchain project are distributed, Airdrops is a new method that has emerged in the recent past. With Airdrops digital tokens are distributed to a broader or wider virtual currency community by the founders of a particular blockchain project. These digital tokens are free and are offered without any monetary compensation from whoever gets them.

So why would any blockchain project give away free tokens? The reasons are myriad and some of these include the fact that the project may be in need of promotion and free tokens present an opportunity to advertise. This is especially so at a time when Initial Coin Offerings are reaching dizzying numbers. Offering free tokens also helps in creating an active community that is in support of the particular blockchain project.

Snapshot method

Airdrops may be carried out in various ways with the most popular method being to send the tokens to the users of a blockchain who were using it at a particular point in time. This can be done by taking a snapshot and then sending free tokens to the wallets that are picked by the snapshot. The wallets that receive the free tokens could be the ones that possess an amount that is higher than the predetermined value.

Prior to the snapshot being taken, announcements are made ahead of time via the communication channels of the project and this could include Telegram chat group, social media, and websites. Since projects are built on varying blockchains taking full advantage of the airdrop opportunities that present themselves requires having the relevant virtual currency.

Early Ethereum Name Service (ENS) adopters rewarded with a hefty five-figure airdrop (Source:Cointelegraph)
Early Ethereum Name Service (ENS) adopters rewarded with a hefty five-figure airdrop (Source:Cointelegraph)

Non-monetary compensation

Despite the fact that airdrops cost the recipient nothing monetarily speaking, there are projects that will expect some form of compensation from the community that gets the free tokens. This compensation could be in the form of doing certain things that support the project such as promoting it on social networks.

Most airdrops are done by blockchain projects following an Initial Coin Offering but there are also some airdrops which happen after a hard fork has been carried out on a blockchain. Last year for instance there was a hard fork of Bitcoin Cash (BCH) where holders of Bitcoin (BTC) received in their wallets the equivalent amount of the former following the hard fork.

Private keys

Airdrops are also done when a project decides to offer tokens to people who have met particular requirements. Cryptocurrency exchange Binance has for instance carried out this sort of Airdrop.

In order to receive Airdrops, one must possess a wallet that supports the cryptocurrency that is being used by the particular blockchain project offering the free tokens. A good number of projects require that potential recipients have the project’s official wallet that will hold the private keys of the digital coins. This makes most wallets from exchanges unsuitable for airdrops since users do not have control over the private keys.

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