As the number of new cryptocurrencies keeps rising and users are constantly trying to discover promising coins to invest in, airdrops came to offer aid to both sides. Investors, whether they are new or experienced, have the opportunity to try new tokens by earning them as rewards.
In the following guide, you will find anything you need to know about all the types of airdrops you can meet, how they work and how to avoid scamming attempts that could even empty your wallet.
What is a Crypto Airdrop?
In brief, ****it is a marketing strategy used by crypto projects to distribute tokens or coins to the public. Airdrops can be an effective way to generate initial interest in a new project. They can also be used as part of an ongoing campaign in order to keep a project top-of-mind with token holders, investors and users.
The tokens are given out for free but usually, the users will need to complete some tasks before claiming the rewards, such as engaging with the social media of the project.
How Do Crypto Airdrops Work?
Even though there are several types, the best way to describe an airdrop is as a giveaway that distributes a number of cryptocurrency tokens to a specific number of wallets.
When the project team announces the giveaway, the participants have to complete any task that the project team requires within a time limit defined by the team itself. The requirement that users have to follow may be actions like spreading the word about the project through social platforms or joining their official Telegram group and Twitter page.
When the time frame comes to an end, the promised amount of the project cryptocurrency will be distributed to the wallets of a few lucky winners.
Why Should Crypto Projects Create Airdrops?
Airdrops are a great way to increase awareness and demand regarding a specific project. As mentioned before, in order to participate, one must follow the project’s social media accounts, join their telegram group and add their wallet address to their profile.
The above actions will also bring as result, users to promote the project to their own network, adding in that way, reputation to the crypto token. Further to the promotion, the higher the number of holders gets, the better the statistics for the crypto project.
Types of Airdrops
We usually meet 4 types: Standard, Bounty, Exclusive and Holder airdrops
The promised amount will be distributed without any requirement for the participants to proceed with further actions or complete tasks.
It is just like bounty campaigns in the cryptocurrency world. They typically require users to complete certain tasks -as described earlier- such as sharing a post about the project on Twitter, joining the project’s official Telegram group, or creating a post and tagging a few friends on Instagram. Additionally, users may be asked to fill out a form with their wallet address and provide proof that they completed the tasks in order to claim the airdrop.
It is typically only given to people who have established ties to the project, such as being active community members or supporters in the early days of the project.
Free tokens are distributed to holders of a certain amount of digital currencies in their wallets. Taking a snapshot at a specific time, the project team will confirm if the wallet of the participant’s balance meets the minimum requirement. In that case, the recipients can claim free tokens according to their holdings within the time of the snapshot.
How to Claim an Airdrop?
The process for claiming an airdrop will vary from project to project. However, the standard and mandatory asset in all kinds of methods is a cryptocurrency wallet such as MetaMask. After creating one, you can check if your wallet received free tokens. If not, chances are you will have to head to the website that hosted it, connect your wallet, check if you are one of the winners and claim the rewards
Airdrop Scams and how to avoid them
If you want to join an airdrop, the first thing you should consider is whether it is legit or a scam. You can find various types of scams in the crypto world and airdrops are not an exception. They are generally distributed in order to reach out to new users by attracting a large number of signed-up users and then sending them spam messages.
It is important to do your own research before you sign up and to make sure that you are comfortable with the requirements of the contest. Try your best to choose projects that have Audit and KYC certifications. Airdrops can be beneficial, but also risky if you do not take into account any potential damage that might result from using them.
Keep in mind, that scams can be very convincing. Some of them will require you to send crypto to an unknown wallet address in order to unlock your free tokens in return. Legitimate airdrops will never ask for your funds or seed phrase. Be careful with phishing emails or direct messages.
In other cases, scammers will announce a fake airdrop -through fake Twitter and Telegram accounts- that leads to a phishing website. They will trick you into connecting your wallet to a website that looks very similar to the original one. As soon as you connect your wallet and sign a transaction, you will have other tokens taken out of your wallet. Therefore, be careful to choose legit hosting platforms.
In order to avoid being scammed, you can follow the below tips:
Be wary of giving away your personal information or cryptocurrency to unknown individuals. Instead, bookmark the official website, social media channels and Telegram group.
Look for reviews from community members who have participated in the airdrop before you decide to get involved. If something seems fishy or too good to be true, steer clear.
In addition to using strong passwords, you can further protect your wallet by setting up a new one and a new email address dedicated to receiving rewards from airdrops only. This can ensure that the funds in your personal wallet are safe from airdrop-related phishing attempts. And most importantly, never share your private keys with anyone
Crypto airdrops are a growing phenomenon in the crypto space. The free giveaways of tokens allow projects to stand out and gain traction, while also giving crypto enthusiasts an opportunity to grow their portfolios with up-and-coming tokens. However, you always need to be aware of the scammers that are waiting to take advantage of you and empty your wallet on the first chance.