If you have been paying some attention to the developments in the blockchain/cryptocurrency sphere, you may have come across the term “airdrops” and you may be wondering what airdrops are? Why are they used? What are the benefits or drawbacks airdrops may have?
Read on and get the answers to every nagging question you may have about airdrops.
So, what are airdrops in the Web3 space?
This marketing strategy entails sending digital tokens or assets like crypto coins / NFTs to the wallets of some or all people registered on a platform or have registered to a giveaway of somesort. The purpose of an airdrop is largely to drum up awareness of the project in order to attract users; showcasing that there are X amount of holders of the specific token/NFT.
Usually, some conditions have to be met for one to benefit from an airdrop. These include being registered on the said platform or performing a simple task like retweeting a tweet about the project which is being promoted through that airdrop program.
What are the types of airdrops in the crypto space?
Standard airdrops. These are basic airdrops where anyone can submit their wallet address and receive the rewards on offer. In most cases, there are limited amounts of tokens or coins for such a giveaway, so the people who express their interest first may be the ones to benefit. Time limits for the airdrop are also a common feature of this type of airdrop.
Bounty airdrops. For these, the recipients are required to perform a task in order to qualify for the airdrop. For example, users may be asked to post on social media about the crypto project and tag the company in order to qualify for the rewards in the airdrop program.
Holder airdrops. These are given to the people who hold coins or tokens in their wallets. Some additional requirements, such as a minimum number of coins or tokens in a given wallet may be imposed to screen those who qualify for this airdrop.
Exclusive airdrops. These are a variation of holder airdrops, with the difference being that winners are selected based on more than just holding tokens or coins in their wallets. For example, an exclusive airdrop may be held for users who are most active in the community created around a crypto project, or they may reward the first people to join the project when it was launched.
Raffle airdrops. This type of airdrop can be a hybrid between any one of the types above combined with a raffle to select the final winners. For example, the most active members of a community (exclusive airdrop) may be entered into a raffle in which ten winners receive airdrop rewards. Some tasks may also be indicated for people to complete and win raffle tickets.
What are the benefits and possible drawbacks of airdrops?
As already mentioned, airdrops help to promote a project and attract users to the protocol. The most loyal users are also rewarded through these programs, which helps to deepen a project’s relationship with its users.
However, some bad actors can use airdrops as avenues to execute scams, such as hackers who want to collect the wallet addresses and credentials of project users. Also, some airdrops may not have liquidity, so it may be hard to convert them into cash or other digital assets.
All in all, airdrops are an ingenious strategy to garner awareness and get an edge over the competition. For users, it is advisable to do your due diligence before participating in an airdrop so that you avoid the bad actors who may have ill intentions for conducting a reward program.
Find out more about Fomo Lab Here:
Discord — https://dsc.gg/fomolab
Twitter — https://twitter.com/fomo_lab
Website — https://fomolab.io
The Avenue — https://theavenue.market
Instagram — http://instagram.com/fomo_lab/
Telegram — https://t.me/FOMOlab
