2017 was the year of ICOs, there were over 200 ICOs and more than $3 billion invested into cryptocurrencies but not all cryptocurrencies use ICOs to bootstrap their project some tend to do Airdrops to launch off their project to the moon.
Here is an article to learn more about ICOs.
Sometimes cryptocurrency exchanges or wallet services also might do airdrops to reward their users for using their platform.
What are Airdrops by Definition?
Airdrops can be defined as a method through which a cryptocurrency project/business distributes a cryptocurrency to the people free of charge. They are usually a way to bootstrap a project or reward users who are a part of the community which helps the project grow.
What are the Reasons to do an Airdrop?
Reward the Loyal Users
Often cryptocurrency exchanges and projects wish to give back to their to appreciate their continued support and airdrops are usually a means to do this where they airdrop some cryptocurrency to people. Exchanges usually have some requirements to be eligible for the airdrops.
To Create Awareness About the Project
Sometimes new cryptocurrency projects airdrop a small amount of their token to the users free of charge to bootstrap the project and increase traction to their project as the cryptocurrency market is huge. This is kind of an advertisement for their project and also helps them create a big user community
How to Participate in an Airdrop?
To participate in Airdrops you first need to know about them and for this, there are many free online services you can use like AirdropAddict, AirdropAlert, IcoDrops. These services will provide you timely information for Airdrops so that you can sign up for them and reap the benefits. Usually, these services will also provide you information about the qualifying criteria so they are more like an AIO solution for airdrops.
Generally to participate in an airdrop you either need to already be hodling the token or fill a form provided by the project and do KYC after which you are eligible to receive the airdrop in your wallet. Since most of the airdrops are ERC20 tokens it is a good idea to get yourself an ERC20 compatible wallet like MyEtherWallet(MEW).
I recently participated in an airdrop of Polymath Network, wherein they airdropped 250 Poly Tokens to everyone who signed up and did KYC. They are worth more than $300 today, so airdrops act as a good way to incentivize users. To be eligible for the airdrop I needed 3 things:
- Ethereum address with at least 1 transaction
- Finish KYC procedure in the form provided by them
- Be part of their telegram group
The KYC process was very simple and took only 1 minute so the overall experience was pretty good.
As you can see here my Polymath Tokens arrived shortly after the airdrop ended and are now trading for more than $1 per token.