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Writer's pictureShraddha Khattri

Airdrops: A New Way to Earn and Distribute Tokens

Airdrops have become an increasingly popular method of token distribution in the cryptocurrency world. An airdrop is a process in which a blockchain project distributes free tokens or coins to a certain group of people or to holders of a specific cryptocurrency. This can be done for a variety of reasons, such as promoting a new project, increasing community engagement, or distributing tokens to a specific group of users.

Image Credit: Zebpay.com

A cryptocurrency airdrop is a process in which a blockchain project distributes free tokens or coins to a certain group of people or to holders of a specific cryptocurrency. The tokens that are distributed through airdrops are often new or upcoming cryptocurrency projects that are looking to build a community and increase awareness about their project.


In order to participate in an airdrop, individuals may be required to hold a certain amount of a specific cryptocurrency in their wallet, or they may need to sign up for the project's newsletter or social media account. Some airdrops also require participants to complete certain tasks, such as sharing a post on social media or referring friends to the project.


Types of Airdrops:

There are several types of airdrops that can be classified based on their distribution methods and requirements:

  • Token Airdrops: These are the most common type of airdrops, where new or upcoming projects distribute their tokens to a group of people or holders of a specific cryptocurrency.

  • Hard Fork Airdrops: These airdrops occur when a blockchain splits into two separate chains, and holders of the original coin receive an equivalent number of tokens on the new chain.

  • Bounty Airdrops: These airdrops require participants to complete specific tasks, such as promoting the project on social media or referring friends to the project.

  • Snapshot Airdrops: These airdrops are based on a snapshot of a blockchain, where holders of a specific cryptocurrency at a certain point in time receive a specific number of tokens from a new project.

  • In-App Airdrops: These airdrops are used in gaming and other applications to distribute tokens to users who participate in certain activities or reach certain milestones.

  • Forced Airdrops: These airdrops are distributed to all holders of a specific cryptocurrency, regardless of whether they have opted in or not.

  • Conditional Airdrops: These airdrops are distributed based on certain conditions such as holding a specific amount of a cryptocurrency or being a member of a certain group.

  • Strategic Airdrops: These airdrops are used as a marketing strategy to increase awareness and interest in a particular project.

How Airdrops work?

Airdrops work by distributing free tokens or coins to a specific group of people or to holders of a specific cryptocurrency. The process typically involves the following steps:

  • The project team announces the airdrop and provides details on how to participate, including any specific requirements or conditions that must be met.

  • Participants register for the airdrop by providing their wallet address or other identifying information.

  • The project team takes a snapshot of the blockchain, or of specific wallets, to identify eligible participants.

  • The tokens are distributed to the eligible participants' wallets. The distribution can occur all at once, or over a period of time.

  • Participants can then use the tokens as they see fit, such as holding them, trading them, or using them within the project's ecosystem.

Applications of Airdrops:

Airdrops have various applications in the cryptocurrency and blockchain world. Some of the main use cases of airdrops include:

  • Token Distribution: Airdrops can be used to distribute tokens to holders of a specific cryptocurrency, holders of a specific wallet, or to a specific group of individuals.

  • Community Building: Airdrops can be used as a way to reward and engage with the community, leading to increased adoption and support for the project.

  • Marketing: Airdrops can be used as a marketing strategy to increase awareness and interest in a particular project.

  • Decentralization: Airdrops can help to decentralize the distribution of tokens, ensuring that they are distributed among a large number of individuals rather than concentrated in the hands of a small group of investors.

  • Tokenomics: Airdrops can be used as a way to distribute tokens to holders of a specific cryptocurrency, holders of a specific wallet, or to a specific group of individuals, which can help in the tokenomics of the project.

  • Gaming Industry: Airdrops can be used for token distribution in the gaming industry, in which players can earn in-game items or currency by participating in airdrops.

  • Token Airdrops as a reward: Airdrops can be used as a reward for participating in a bounty campaign, referral program, or other promotional activities.

  • Forks: Airdrops can be used to distribute tokens when a new blockchain is created as a fork of an existing one.

  • Airdrops can be used to increase the liquidity of a specific cryptocurrency by distributing them to a large number of holders.

  • Airdrops can be used to encourage individuals to hold a specific cryptocurrency over a long period of time, which can help to stabilize the price of the currency.

Pros of Airdrops:

  • A way to earn tokens without investing money: Airdrops provide an opportunity for individuals to earn tokens without having to invest their own money, making them accessible to a wider range of people.

  • Increased adoption and community engagement: Airdrops can be used to reward and engage with existing community members, leading to increased adoption and support for the project.

  • Decentralized distribution: Airdrops help to decentralize the distribution of tokens, ensuring that they are distributed among a large number of individuals rather than concentrated in the hands of a small group of investors.

  • Marketing strategy: Airdrops can be used as a marketing strategy to increase awareness and interest in a particular project.

  • Increased liquidity: Airdrops can increase trading volume and liquidity for the project's tokens.


Cons of Airdrops:

  • Risk of scams: Not all airdrops are legitimate, and some may be scams. It is important to do your own research and due diligence before participating in an airdrop.

  • Low retention rate: Many users may simply sell the tokens they receive in an airdrop, rather than holding or using them, leading to a low retention rate.

  • Lack of control: Airdrops can distribute tokens indiscriminately to holders of a specific cryptocurrency, which can lead to tokens being distributed to individuals who have no interest in the project or its ecosystem.

  • Lack of accountability: Airdrops can be used to distribute tokens to individuals who have not invested in the project, which can lead to a lack of accountability among token holders.

  • Regulations: Some countries may have restrictions on airdrops and other forms of token distribution, which can make it difficult for projects to conduct airdrops in certain jurisdictions.


Overall, airdrops offer a new way for individuals to earn tokens and for projects to increase engagement and adoption. As the cryptocurrency world continues to evolve, we can expect to see a growing number of projects using airdrops as a method of token distribution.

Airdrops are a win-win for both projects and participants, increasing engagement and support for the project

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