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What is airdrop in crypto: Types, Principles of Airdrop Work Process cover

What is airdrop in crypto: Types, Principles of Airdrop Work Process

Published Mar 18, 2024 by CryptoDiary

Generally, airdrop gained popularity in the early 2010s. But we should first define what we are dealing with and what is a crypto airdrop — a fascinating thing in the digital currency world. Let's first explore all about airdropping crypto, how it works, and what you need to consider before you start working with it. The experts at Cryptoset.gg will gladly clarify that.

Step Into the Realm of Airdrop

Airdrop is a process by which a project acquires a certain amount of crypto assets and distributes them for free to people who meet specific criteria and requirements. At first glance, the definition could be more specific and clear. But this is because crypto airdrops 2024 are used in various forms. Airdrops can be divided into two broad categories: tokens and NFTs.

  • Tokenization: This is the process when a crypto platform determines to create its token. For user rewards, the project sends half of the total supply of crypto coin airdrop to users' wallets. It is estimated based on the volume that each user has traded on the platform. This token helps to keep users away from competitors.

  • NFT airdrop: An NFT project aims to encourage the current sale of NFTs by promising NFT holders that they will receive NFTs out of thin air. In this manner, the current sale of NFTs sells out, and the community remains involved in anticipation of the next NFT airdrop.

Now, let’s observe what is an airdrop crypto?

In cryptocurrency chat rooms, you could hear people enthusiastically discussing airdrops. It is a hot topic of interest to crypto enthusiasts in particular.

At the intersection of blockchain and marketing, campaigns aim to raise awareness of a startup company's platform or product and encourage the audience to use their token widely.

Under what is an airdrop crypto is hiding a marketing strategy used by projects based on the blockchain. It is a massive distribution of free tokens as part of a broader advertising initiative. A direct deposit is created on the user's crypto wallet.

How Airdrops Can Help Projects Be More Valuable?

Top Crypto airdrops 2024 are a great way to expand your user base immediately by giving many people a reason to use the product. Building an extensive network of active users is one of the most challenging prerequisites for creating a new crypto project.

  1. Airdropping crypto is exactly how crypto projects focus on speeding up this process. This way, they expect a substantial influx of potential users.

  2. Airdropping crypto is a powerful force in strengthening the project's community. They provide users with a share of success in the project. It encourages them to contribute to the project in any way possible.

  3. Airdropping crypto rewards early adopters with a "thank you" that creates additional loyalty.

  4. Airdrops are a great way to promote your project on the market. They attract much attention, raising awareness of the project's products and services.

According to WeMeta co-founder and CEO Winston Robson, while crypto airdrops are typically used to promote new projects, some existing projects reward longtime community members.

For instance, in 2021, the Ethereum Name Service issued tokens to existing ENS domain owners based on a system that partially depends on how long their domains have been operating.

Types of Crypto Airdrops 2024

We have figured out together what is crypto airdrop. Now it’s time to step further in our friendly research. Depending on the ultimate goal, cryptocurrency projects choose different types of airdrops. Today, other ways exist to deliver guaranteed goods to the user's virtual space.

Standard airdrop

The essence of a standard airfield is that the users do not have to complete any tasks. The only thing they have to do is register an account. However, keep in mind that you should speed up the process of signing up, as there can only be a certain number of crypto coin airdrop (tokens) tied to the release of a new project, which are issued on a first-come, first-served basis.

For example, RabbitX uses standard airdrops to incentivize new users who sign up for its platform.

Exclusive airdrop

Exclusive airdrops are often intended to reward users for time spent on the project, money spent on non-gesture activities, or the level of engagement on the forum. A great example of an exclusive airdrop is the Uniswap exchange, which gave 400 UNI tokens to each user.

Holder airdrop

The next step is to determine what is a crypto airdrop, which hides under the statement “holder airdrop.” This type rewards users who "hold" or have accumulated a certain number of tokens during the promotion. It is determined by a snapshot of the user's wallet, which can be taken on a particular day or over a certain period across the community. Regardless of the reward, rewards are given to those who have reached or exceeded the threshold.

Raffle airdrop

Stepping into this type, the question of what crypto airdrop is becoming more vivid and vast. Suppose a startup announces a fixed number of rewards but receives many applications. In that case, it may implement a lottery mechanism to determine randomly selected winners, a so-called airdrop lottery.

As an example, Revv, Wolf Game, and Phantom Galaxies platforms gave away $500 worth of coins to 100 lucky players.

A comprehensive list of airdrops is available at Cryptoset.gg. Every crypto enthusiast can discover something for their taste and interests there.

The Final Touch to What Is Airdrop Crypto: How It Works?

Before participating in airdrop, users must fulfill certain conditions. The project formulates these and can include everything from registration to completing tasks. Some requirements include owning a certain amount of the project's cryptocurrency. The main requirement for obtaining coins is having a cryptocurrency wallet.

There are two dates to look out for when announcing an airdrop: the "snapshot" time. This is when the project takes a screenshot of all wallets eligible to receive coins; the second is the distribution date. It is when the released coins should arrive in the wallets.

Summary

Therefore, we have clarified what is airdrop crypto, what types of airdrops are, and how everything works. It is an innovative way to distribute new coins or tokens to potential users. Besides, it is an opportunity for crypto enthusiasts to make money by selling the tokens they have received through an airdrop.

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