Why do cryptocurrency giveaways
Developers use airdrop for a number of purposes. Let's take a look at the most popular ones:
1. To build an audience. Through the distribution of the project's native tokens, developers launch the cryptocurrency into circulation. The implication is that some of the participants of the airdrop will become users of the platform.
2. To attract the attention of investors to the project. The opportunity to get free cryptocurrency attracts many participants in the crypto community. Therefore, the airdrop is a great way to announce the project loudly and attract investors' attention to it through discussion.
Types of Airdrop
There are five main types of Airdrop. They differ in terms of participation conditions and circumstances.
1. normal Airdrop. A cash distribution without any conditions or with minimal requirements.
2. bounty-airdrop. Distribution of cryptocurrency to users, who have fulfilled certain requirements of the project. For example, developers can ask to repost an entry from the community of the project.
3. limited airdrop. Distribution of tokens to a certain group of people, for example, early investors of the project.
4. audience airdrop. Distribution of cryptocurrency to people who already use the project's services.
5. Airdrop on the background of a hard force. The word hard forge in the crypto industry refers to an update of the cryptocurrency code, which can lead to the branching of its blockchain. A new project can continue to exist on the created "branch".
For example, on September 15, 2022, Ethereum, the second most capitalized cryptocurrency, migrated from the PoW algorithm to PoS. The cryptocurrency community members who disagreed with the ETH changes launched a PoW fork of the token — ETHPoW (ETHW). A day after Ethereum migration to PoS, some crypto platforms launched an airdrop of the new cryptocurrency. Members of the crypto community received ETHW in the proportion of 1:1 to their Ethereum balance.
How to participate in the Airdrop
The first thing to do is to read the terms and conditions of the cryptocurrency giveaway carefully. Without their clear fulfilment, the transfer of coins can be refused.
It is necessary to register a cryptocurrency wallet in advance and subscribe to the social networks of the project to keep track of news about the distribution.
Here is what else you should pay attention to:
- Some airdrops may turn out to be fraudulent, which means the user risks not getting the expected amount of money.
- In some giveaways, developers transfer tokens only after some time.
- It is not always possible to withdraw tokens from the platform.
- Only verified users can participate in some giveaways.
- There are no guarantees that the recipient will be able to sell the tokens.
This article is for guidance only. We remind you that airdrops are a great risk and we do not recommend participating in them in any way.