What Is a Crypto Airdrop and How Does It Work?

There are over 4,000 cryptocurrencies in existence, and most of them have no following or trading volume. But that doesn’t stop the crypto creators from pushing their coins to the front of the queue.

These days that includes utilising some creative marketing tactics, such as airdrops. Essentially, an airdrop is a distribution of free coins to multiple crypto wallets to gain attention for the currency.

However, established coins use airdrops too, and any Bitcoin wallet can receive free funds at any time. And you could use a Bitamp app to buy bitcoins to make things easier. In this article, we’ll elaborate on the concept of airdrops and why many companies use them.

Crypto Airdrops Explained

If you know anything about marketing, you’re probably aware that giveaways and promotions are incredibly popular. Everyone likes free stuff, and it’s no different when it comes to cryptocurrency.

Blockchain-based startups popularised crypto airdrops to bootstrap their crypto project and get more people trading. While this method might seem unconventional, many companies rely on it to expedite the adoption of a specific currency.

These airdrops are usually announced on social media or a company website so you can anticipate a change in your Bitcoin wallet online. It doesn’t have to be Bitcoin, either. Usually, any newly-minted coins are distributed to numerous crypto wallet holders.

Is Everyone Eligible?

Naturally, you might wonder if all you have to do is own a Bitamp online bitcoin wallet or any other crypto wallet. The answer is – it depends. Most crypto airdrops don’t require any eligibility requirements, while others do.

In some cases, the potential recipients of airdrops will have to hold a specific type of coin or have a minimum balance to become eligible. It’s also possible that companies promoting the cryptocurrency will ask users to perform a series of tasks.

You might have to post about the pending airdrop on your social media page or write a blog post. However, most startups engaging in crypto airdrop marketing don’t have any specific requirements for eligibility.

Why Do Crypto Project Use Airdrops?

The simple answer is that they do it because it pays off. Still, some of the airdrops involve generous amounts, and it might make you wonder how exactly it translates to profit. Here are several explanations to provide a clearer picture.

Crypto Airdrops Create Awareness

The competition in the crypto market is fierce, and every little bit of recognition matters. Airdrops are an incredibly straightforward way to let people know about what you have to offer.

For example, in 2020, Uniswap, one of the biggest decentralised exchanges in the world, airdropped their native coin UNI.

All wallets with at least one transaction via their platform were eligible for 400 units of their base asset. This went on to be one of the most lucrative crypto airdrops. Those who held on to the coins could sell them for £8,600.

Crypto Airdrops Are Rewards for Loyal Users

Many investors don’t stick around in the crypto ecosystem for too long. They want to get the highest return on their investment and call it a day.

This approach is incompatible with the crypto project that is all about sustainability in the long run. Therefore, some companies choose to reward their most loyal users by airdropping coins into their wallets.

Crypto Airdrops Attract Investments

The buzz created around a big crypto airdrop often drives the price of the coin in question upwards. Consequently, that generates more attention around that cryptocurrency leading to a more significant number of investors.

More people buying and selling coins is the ultimate goal of airdrops in the first place. If conducted flawlessly, the amount spent on crypto airdrops will be significantly lower than what companies deploying them received in return.

Crypto Airdrops Offer Access to Crypto Community

Undoubtedly, there is a community surrounding everything cryptocurrency-related. Crypto projects often use airdrops to gather data from the members of that community.

They do so by asking them to provide some personal information such as an email address or a social media account. Both of which allow them to create more targeted campaigns.

Getting Ready for a Crypto Airdrop

Regardless of how successful a crypto airdrop campaign turns out to be, free coins are always welcome.

They’re not the only free crypto tool, but they are one of the most successful. If you receive a few Bitcoins in your online Bitcoin wallet, you’ll likely rush to invest it or store it in your wallet and wait for the right price.

Either way, you’ll likely continue to be engaged, and that’s the entire point of any marketing, including crypto airdrops.