Airdrops Explained: Free Cryptocurrency & Token Distribution

In the context of cryptocurrency and digital monies, an “airdrop” is simply where a company will send or distribute free coins or tokens directly into your cryptocurrency wallet. Money no longer grows on trees...it’s airdropped!

Airdrop History and Why Do Companies Use It?

If you’re wondering who in their right mind would be so generous as to randomly give out free money, we promise there is a method to this madness.

The digital money space is convoluted enough and filled (unfortunately) with players who care more about scamming you for a quick buck than contributing value to the space to make it fun for everyone.

This is why airdropping is perhaps one of the most important roles with respect to ICOs--to generate awareness as to new projects entering the space.

#1 - Generate Awareness

The digital money space is convoluted enough and filled (unfortunately) with players who care more about scamming you for a quick buck than contributing value to the space to make it fun for everyone.

This is why airdropping is perhaps one of the most important roles with respect to ICOs--to generate awareness as to new projects entering the space.

• In 2018, ICOs raised close to $7.8 billion, yet where is this money going? What’s the ROI on a digital money community level?
• In 2019, the amount in which ICOs generated dropped more than 95%, with ICOs raising only a total of $371 million. Again, where is this money going? What’s the ROI on a digital money community level?
• As for 2020 and the future, there are some in the industry who believe that ICOs will actually die off, especially after the major decline in 2019.

Most ICOs go unnoticed, with users painfully reading whitepaper after whitepaper, hunting down the good projects, and potentially falling victim to garbage. In garnering awareness, companies are also able to learn what attracts potential investors and consumers. Simply supply and demand.

#2 - Knowing Your Customer

In order for users to participate in an airdrop, companies will traditionally send a form similar to the above, asking a potential customer to answer questions that are designed to gauge what the company’s particular demographic likes and how that plays into future marketing techniques.

#3 - Raising Funds

Back in September, Uniswap captured the hearts of the DeFi community as it announced its Airdrop of its Uniswap token (UNI). Up and until September 1, 2020, everyone who traded on Uniswap were rewarded with at least 400 UNI tokens, which already had a value of at least $2,000 as of September 18.

For more information on the Token Contract Address, please click here.

1. Go to https://app.uniswap.org/#/swap and click “Claim UNI” here 2. Insert your Uniswap ETH address in the box below 3. Then you are done. 400 UNI in your wallet now!

#4 - Your Loyalty is Rewarded

Cryptocurrency is a volatile market, in case this comes as a surprise to you. Thus, loyalty doesn’t really exist in the space, going only as far as how much money it can earn its user, who is always on the lookout for the next big token and/or project to invest in. Unfortunately, this also comes at the expense of leaving other companies behind. Just like that.

Keeping this in mind, some AirDrops are structured in a way that the more tokens you hold, the more you will receive in subsequent AirDrops. In other words, incentivizing loyalty.

#5 - Keeps the ‘Whales’ At Bay

A wondrous creature in the deep blue, but in cryptocurrency waters, whales are dangerous and will eat you alive. One of the worst things that an ICO can undergo is a hostile takeover by whales.

For the uninitiated, “whales” in the digital money world, is a really wealthy investor who buys a ton of tokens in an ICO and doesn’t let anyone else partake.

An example of this would be the ongoing feud between Steem and Tron. For more information on this, please click here.

“Whaling” is an issue because crypto is supposed to be decentralized...how can we maintain a decentralized ecosystem if one or few wealthy individuals control most of the supply? Case and point.

AirDropping’s utility provides for an even distribution of tokens proportionate to a user’s existing holdings while keeping a decentralized environment.