Airdrop: what is it?

In L’universe of the cryptocurrenciesthe term “airdrop” refers to the free distribution of a token. Several units of a cryptocurrency are sent to hundreds or thousands of wallets (portfolios).

Why such free distribution? Usually, the operation aims to make a particular token better known, to generate buzz about it. In fact, the stronger the interest in a cryptocurrency, the more its price is able to rise. More people are likely to be interested in it and therefore the chances are better of seeing this young currency being listed on a major exchange such as Coinbase or Binance. The airdrop can therefore be likened to a promotional action: given the intense competition that exists between start-ups in the field, an airdrop can help draw attention to a particular token.

To participate in an airdrop, you must first have a wallet such as MetaMask or Trust Wallet, or even the wallet specific to a particular currency. Usually, it is necessary that this wallet has a minimum of tokens of the currency involved.

Sometimes, one or more actions are requested from the person who wants to benefit from the airdrop: registering on the currency’s Tweeter, retweeting a post…

airdrop stories

Let’s take a look at a few airdrops that have been around since this concept has been around and we’ll get a better idea of ​​what kind of practice this is.

AuroraCoin

The very first airdrop took place on March 25, 2014. Iceland had launched AuroraCoin (AUR) with the aim of making it a national cryptocurrency. Each citizen or resident of the country who submitted their ID number received 31.8 AUR. A total of 21 million AURs were thus distributed, i.e. 50% of all the tokens put into circulation. In July 2022, one AuroraCoin was worth nearly $1.50.

bitcoin-cash

In 2017, two of the great supporters of the Bitcoin, Roger Ver and Gavin Andresen, have lent their support to an important evolution of Bitcoin, Bitcoin Cash (BCH). It turns out that transaction management had slowed down significantly. BCH proposed to solve this situation by increasing the size of the blocks considerably – eight times larger than that of the blocks of the blockchain bitcoin. Although controversial, BCH was born and a huge airdrop was organized for the occasion: each Bitcoin owner who chose to support Bitcoin Cash received in his wallet as many BCH as he had BTC (Bitcoin) . At that time, BCH was worth about 1/10^e of BTC and therefore, this airdrop had great consequences for them. Even today, BCH is in the Top 30 cryptocurrencies and its value is equal to 0.005 BTC.

Uniswap

In 2020, the decentralized exchange platform Uniswap wanted to thank those who had trusted it since its launch in November 2018. Nearly 250,000 active Uniswap members received 400 UNI, the equivalent of more than $1,500. per person.

Looks

On June 16, 2021, LooksRare, a marketplace, offered a high-profile airdrop: anyone who had transacted for a total of at least 3 ETH (Ethereum) on the NFT platform OpenSea, and which put on sale a NFT on LooksRare, was eligible for thousands of LOOK tokens. Admittedly, this token had only a small importance: it was ranked 230^e of the cryptocurrencies in July 2022. Its value at the same time was still equal to 0.3 dollars, which is not totally negligible.

El Salvador

at thefall 2021, in order to encourage the adoption of Bitcoin by the population of El Salvador, the government of this country credited anyone who installed the corresponding wallet with a value of approximately 30 dollars in BTC.

OpenDao December 23, 2021

In December 2021, OpenSea users were rewarded: they could claim SOS tokens in proportion to the activity they had had on OpenSea. Over 120,000 wallets have benefited from it.

Types of airdrops

As we have seen in the above examples, there are several types of airdrop. The main ones are as follows.

• Airdrop standard – without counterpart

In this type of airdrop, tokens are distributed free of charge without any consideration being requested from the user. As in the case of AuroraCoin, all you need is a wallet to be able to benefit from it. Likewise, when Dapper Labs launched the CryptoPunksthese were originally offered for free.

A time factor can be associated with the airdrop: the offer is valid for a certain number of days or until the supply is exhausted. volume of tokens offered. Sometimes, too, a lottery is associated with such a distribution.

• Airdrop as a reward

This type of airdrop appears to be the most commendable: as in the case of Uniswap or OpenDAO, it aims to thank those who have supported a given project by distributing free tokens. Thus, a platform or a currency expresses its gratitude to those who have kindly supported it in its origins.

• Airdrop conditional on task execution

In this type of airdrop, tokens are rewarded to those who agree to perform a certain number of specific tasks. For instance :

• subscribe to the cryptocurrency Tweeter account;
• share or retweet a tweet;
• post a message extolling the merits of this currency on a social network or on a forum;
• create an account on the cryptocurrency platform;
• subscribe to a newsletter;
• make a transaction, even a small one, to the cryptocurrency platform or wallet…

In English, we speak of Bounty to designate such an airdrop.

Does participating in an airdrop involve risks?

At first glance, airdrops would only seem to be good. Yet, over the years, this practice has come to breed suspicion.

First of all, airdrops conditioned on the execution of a certain number of actions generally represent a waste of time. Sometimes you have to spend a good ten minutes or more to register on the account Twitter or the forum Discord of a currency, post or relay tweets, post blog entries, and also keep the proof of all these actions to ultimately receive a few tokens of a currency whose value is minimal.

Sometimes it happens that the airdrop asks to send small amounts of an established currency (Bitcoin, Ethereum, etc.) to an address that will thus be well stocked. However, the one who mounted the corresponding operation can disappear overnight, after having pocketed his winnings.

It also happens that users receive many free tokens of a new currency, which leads to raising its rating since it can claim a large number of users. However, once that currency has reached a certain threshold, the originator of the transaction sells its assets, pocketing handsome profits while the currency in question collapses – this practice is commonly called ” rug sweater (pulling the carpet).

Where to find airdrops?

There are various sites listing airdrops including airdropalert.com, airdrops.io Where airdropbob.com. Some of them can alert you by email of new opportunities.

In addition, when you are an active user of certain blockchains, it is possible that from time to time, the corresponding platform informs you of the upcoming airdrop.

To avoid risky airdrops, it is best to carry out research on the currency in question, even if it means consulting specialized forums on Reddit or Discord and getting information from other users.