What is Airdrop?

Modified on Tue, 20 Feb 2024 at 01:43 PM

What is Airdrop? 

To put it simply, airdrop is giving coins or tokens to users for free. Normally, airdrop has been used as a marketing strategy to introduce and promote new coins or tokens. Developer teams are sending free coins/tokens to users’ wallets to gain more early adopters or potential users.

When a start-up launches a new product, they offer a lot of giveaways, like discount codes and promotions. Shopping apps like Lazada and Shopee do not make profits during the first few years as they pay their money to attract more customers first. This is the price they are willing to pay. It is called “Customer Acquisition Cost (CAC)”.    

Similarly in the Crypto or DeFi world, no matter how great the product is, it will not be successful without users. It is essential to introduce the product to the blockchain community and gain new users. 

Types of Airdrop

We can categorize airdrops into 5 types, based on the criteria for receiving the airdrop.

1) Standard Airdrop

This is a typical type of airdrop. Users can receive free tokens by registering with their email address/wallet address or signing up for a newsletter. 

2) Bounty Airdrop

This type of airdrop requires users to perform simple tasks. These tasks include re-tweeting posts about the project, or following the project’s official channels such as Facebook, Instagram, or Telegram.

3) Exclusive Airdrop

This one is an exclusive airdrop to a group of users who have been contributing to the project. For example, in September 2020, Uniswaps distributed 2,500 UNI to its loyal users. Bitkub also airdropped 10,000,000 KUB to users before the public sale.   

4) Hard Fork Airdrop

This one is quite different. At the point when a coin hard forks from its original blockchain, another coin is created, and the people who held the first coin will get an equivalent amount of the new coins in their wallets. The best example of this would be the Bitcoin Cash (BCH) hard fork that happened in 2017. Bitcoin holders got an equivalent amount of BCH consequently.

5) Holder Airdrop

This airdrop is similar to the Hard Fork Airdrop in the way that the coin holders will receive certain amounts of new tokens. For instance, IOST holders will receive Donnie Finance tokens. This token is one of the projects established on the IOST blockchain.   

There is a certain criteria that we use to consider supporting each airdrop. In the past, we have supported Holder Airdrop types with Spark (FLR) and Songbird (SGB) to XRP holders as well as Donnie Finance (DON) to IOST holders. For more upcoming airdrop events, you can follow our official announcements on our official channels. 

You can read more details here.

Reference: https://www.sofi.com/learn/content/crypto-airdrop/

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