During Initial Coin Offering, crypto developers often provide crypto assets to certain individuals or groups for free. We identify this free offering as airdrop and the purpose of the giveaway is usually promotional to stimulate people’s awareness of the newly developed crypto. Another possible purpose of the giveaway is to increase the trading volume when the crypto enters the trading platform following its ICO.
Why Do Cryptocurrencies Use Airdrop?
The competition within the cryptocurrency market is so stringent that developers need a powerful tool to stick out from the crowd. By providing free assets to prospective individuals, in the form of tokens or coins or a combination of both, new crypto developers attempt to draw the crowd’s attention to their crypto, encouraging more vigorous trading activities. Based on experiments and experience, an airdrop is proven to be quite powerful to achieve such a goal.
At Whom the Campaign Is Aimed?
Crypto developers don’t distribute their free assets haphazardly. They are looking for prospects that will likely “give something back” in return for the giveaway. During the initial stages of the airdrop campaign planning, they will try to acquire the snapshot of the blockchain to determine blockchain holders whose potential interaction with their new crypto will likely be beneficial.
In a nutshell, developers generally put their mark on owners of popular blockchain-based cryptos, such as Bitcoin, Dash, and Ethereum, when they want to carry out an airdrop campaign. Nevertheless, it is also possible for any interested individuals who participate in the campaign to receive the free assets even if they don’t currently have any significant assets from other cryptocurrencies.
How to Participate in an Airdrop Campaign
If you are interested in participating in crypto airdrop and prospectively receive the free assets, several channels are available for you.
- Be a crypto holder.
As mentioned above, crypto developers target individuals with significant blockchain assets. If you own a significant number of Bitcoins or Ethereum, your chance to get targeted by multiple airdrop campaigns will be bigger. This seems to be a passive strategy to receive the airdrop, but it does work.
- Sign up for the campaign.
When you visit the websites of new cryptos, you can sign up to receive all relevant updates. Most new cryptos generally encourage the members of crypto communities to sign up for a newsletter, which allows them to receive newly released information, including the one about the airdrop. By joining the new crypto community, the developers may award your interest and attentiveness during the distribution of the free assets.
- Go for the Bounty.
Because the primary function of airdrop is to promote the new crypto, your chance to receive airdrop crypto will be bigger if you actively assist in this promotional effort. Help the developers spread the word using your social media accounts, share the links, and do anything that you can do and your active participation may transform into a real bounty.
- Join the community.
Crypto developers distribute the free tokens and coins not only among individuals but also groups. Once these assets arrive at a certain group of people, every member of the group might be eligible to receive a share. Join any crypto groups you are interested in and be an active member in the group to increase your chance to receive a share of the assets that the group receives.
Airdrop strategy is relatively new, but there are already lots of individuals who make airdrop hunting their new career. You may now be interested in joining this new group of fortune seekers in the crypto world; however, before you attempt to hunt high and low for airdrops, you need to understand some possible risks associated with such a pursuit.
“Crypto developers distribute the free tokens and coins not only among individuals but also groups”
The Risk of Airdrop
There are currently hundreds of new cryptos that offer airdrops to potential recipients. This sounds like a big pot of gold coins for fortune seekers, right? Well, there are several risks associated with the pursuit of airdrops.
- Data Theft
When you sign up for a certain airdrop campaign, you generally need to submit your credentials, which include your email, wallet address, and other pieces of sensitive information. If you are dealing with a scammer instead of real crypto, those pieces of information might be exploited and misused. If you start receiving spam and phishing emails, that can be a sign that you are dealing with a scammer.
- Private Key Scam
As a wallet owner, you have both a private key to managing your wallet and a public address for transactions. You should never share your private key unless you want someone to wreak havoc in your wallet. If an airdrop campaign requires you to submit your private key, you should leave immediately. This scam generally targets individuals who are new in the crypto business and are not aware of how vital their private key is.
- Referral Scam
A fake campaign may trick you into signing up for a partner airdrop in which you will receive airdrops if you sign up using a certain referral code. The fact is that you are not signing up to get free assets, but you are signing up so that another unscrupulous individual who invites you gets bonuses or airdrops for the referral program in which you inadvertently participate.
- Dump Airdrop
Scammers with weak or even non-existent blockchain projects generally use this strategy to reap small yet easy and quick profits. An airdrop campaign is designed to attract individuals to join a particular blockchain project. If this project is real, it can potentially transform into a long-term business.
However, some individuals simply distribute airdrops to make their new crypto sellable without having any intention to make the business long-term because the project that backs it up is usually non-existent. After they get a certain number of their assets purchased, they immediately dump and sell all their assets. And then they disappear with all the easy profit that they just reap.
How to Avoid the Scams
If you want to be an airdrop hunter, make sure that you pursue only real airdrops from real cryptos. Whenever you find airdrop campaigns, be sure to examine the crypto, its website, whitepaper, social media pages, and anything that can convince you that the airdrop is real.