Airdrops: What They Are and Their Various Uses in Cryptocurrency Projects

Airdrops: What They Are and Their Various Uses in Cryptocurrency Projects

Cryptocurrency airdrops — free crypto coins or tokens — have become a common way for crypto firms to market themselves. This article explores what airdrops are, their history, benefits, and their use in crypto projects.

In the cryptocurrency and blockchain space, an airdrop is a procedure for issuing free crypto tokens or coins to existing and new holders of a particular cryptocurrency, for instance, Ethereum, Bitcoin, Tron, among others.

Airdrops create attention and new followers, leading to an immense user base; thus, more coins or tokens are distributed. Crypto airdrops are a common marketing stratagem utilized by crypto firms to cause interest, issue decentralized tokens or coins, and nurture a thriving community.

History of Airdrops in Cryptocurrency

Airdrops are usually announced on the cryptocurrency firm’s website and crypto forums. Once considered a grotesque form of guerilla marketing, airdrops have cascaded in traction in the crypto space since 2017. However, the crypto airdrop in history happened in 2014 under the Aurora coin project.

Many cryptocurrency projects have used the approach to hasten adoption, fancy the community to help popularize and promote a project or reward loyal users.

Airdrops unfolded into a strategy that went beyond marketing. Crypto firms would promulgate airdrops, and coin holders would obtain bonus coins in equal measure to the number of coins they own as a means to enhance the currency value. Currently, airdrops have become common.

Why Crypto Airdrops?

Creating Hype and Marketing

The fundamental reason for cryptocurrency firms to do an airdrop is to obtain leads to enhance the company’s growth. Airdrops aimed to create hype, and marketing always requests for a quid pro quo. For instance, they include completing activities, such as following a crypto company on their social media pages, telegram participation, referrals, and registration.

Rewards to Early and Loyal Users

Several crypto organizations reward their early crypto investors with extra tokens or coins. This makes an Initial Coin Offering (ICO) more fascinating. It’s a practical and fun way to get free crypto. Also, long-term (loyal) users are frequently rewarded with free coins as an airdrop for their loyalty.

Promote Decentralization

A fundamental and essential tenet of cryptocurrencies and blockchain is decentralization. Therefore, one of the reasons why crypto companies issue airdrops is to promote decentralization through equal distribution of tokens or coins. This ensures there is less power vested with a few persons with many crypto tokens or coins who can manipulate the prices of particular cryptocurrencies.

Creating Brand Awareness

Currently, it’s not easy for new crypto companies to gain exposure in the cryptocurrency and blockchain space. There are many, a thousand, of firms with their crypto coin or token. Therefore, many of these companies use airdrop as a strategy to build much exposure during their start-up phase, when the token is worth nothing or little.

What Are Some of The Famous Examples of Airdrops?

Ontology has a distinctive infrastructure that supports Layer 2 scalability and robust cross-chain, providing businesses with the versatility to create an enterprise blockchain that matches their needs. Ontology (ONT) is among the popular airdrops. In 2018, Ontology issued an airdrop in its original cryptocurrency, 1000 ONT, for persons who registered for its newsletter and to NEO investors as a reward for the NEO users for the support they offered during its fundraising. As a result, 10 million ONT worth around $42 million were airdropped and traded at $4.2 per ONT.

The coin price later shot up to around $11 per coin.

Uniswap is another famous example. In 2020, Uniswap, the most popular DEX, issued an airdrop in the form of UNI to all users who had used their wallets to perform a minimum of one transaction in the UNI platform before Sept 1, 2020. A qualified wallet received 400 UNI.

Later, those who held were immensely rewarded for their loyalty and patience as the UNI value rose sharply from $2 to around $30 per UNI as of April 2021.

1inch is a blockchain that unifies decentralized protocols, enabling the most protected, fastest, and lucrative operations in the DeFi space. Its token is known as 1INCH. 1inch too issued an airdrop worth of 90 million 1INCH tokens in December 2020 to an excess of 55,000 addresses. The qualifications were that an address needed to have traded a minimum of $20 or executed four trades prior to the airdrop day. By then, 1INCH traded around $2.7.

The price of 1INCH later shot to around $6 in April 2021.

Are Airdrops of Benefit?

Since cryptocurrencies are unregulated, it’s risky for investing. Airdrops provide a risk-free ticket for venturing into crypto space. Also, the coins or tokens are distributed for free. Besides, some the airdrops gain in value, others to incredibly high value. For example, the UNI airdrop was issued at $2 per UNI and later rose to $30.

Another benefit of airdrops is that it offers one an opportunity to be involved with a blockchain startup at its initial stages. In addition, no one knows when the price will skyrocket; thus, you don’t want to miss out. Finally, airdrops are a source of extra income, providing flexible working hours, especially for the pro airdrop hunters.

Do Airdrops Exist in Free TON?

Free TON uses the meritocracy way of distributing its tokens, TON Crystals. All tokens are earned through partnerships and contests in exchange for one’s contributions. There are no token sales or ICOs of any kind. But, airdrops do exist, such as holder airdrops. But, airdrops do exist, such as holder airdrops. Here, community members or partners create projects within the Free TON ecosystem and earn Ton Crystals as a way of appreciation. Being a community blockchain, Free TON has several sub-governances (SGs), which with the aim of popularizing Free TON in their region, they issue airdrops, for instance, the Free TON Mexico SG airdrop. Also, an airdrop was issued through CEX.IO in collaboration with Free TON to promote the Free TON blockchain. Here, one qualified to be rewarded in Ton Crystal for the first deposit made in fiat currency.

Parting Shot

As much as airdrops are interesting, with some users benefiting immensely from valuable airdrops, many others have been victim to the sublimed guarantee of the “next big thing” in the crypto space. Therefore, it’s best to do due diligence since not all airdrops are genuine.

Find out more about the Everscale
Subscribe to our social networks and stay up to date with the latest news
SUBSCRIBE ON SOCIAL
Free TON House
Origin