Cryptocurrency Airdrops – A brief insight
Cryptocurrency Airdrops – A brief insight

What is an airdrop?
In the cryptocurrency world “Airdrop” refers to the process of dropping new tokens into
crypto wallets of individuals mostly for free or for some promotional service . Airdrop is
marketing method to increase the hype around a new token or protocol which is very cost
effective as it drives more people to the cryptocurrency network as they are receiving coins for
free. Airdrop relies on the “network effect” and involves people who are already active in the
crypto space so that it can target the right people to spread the word around about the new
token/protocol in the market
Airdrops are conducted by the organisation or community behind the development of the
token or protocol and are usually done after the ICO or the initial coin offerings or when a
network decides to bring their token in the marketplace for people to trade.
Marketing is very crucial in the success of any cryptocurrency project as it is a very
competitive space with new technologies emerging every now and then, Airdrops are a great
way to market crypto projects specially for startups who have to spend their money very
judiciously . For example- OpenDao’s airdrop of it’s SOS tokens shot-up it’s twitter following
to 60,000 users and the Optimism network’s OP token airdrop drove so much traffic to their
site that it caused problems on the site itself.
Airdrops are also used in the case of hard forks i.e when a new blockchain is parted from the
existing chain the new tokens of the updated blockchain can be distributed through Airdrops
which does two jobs for the new blockchain-marketing and adaptation of the new chain
which was the case in hard fork of bitcoin which created Bitcoin Cash or BCH which was
airdropped in users wallets.

Criteria of participation
The participation criteria is set by the organisation behind the project and can vary from a
social media activity such as retweeting a post or following a twitter account or sometimes it
can also depend on your wallet balance of an existing cryptocurrency, for example-in the
Bitcoin Cash airdrop the amount of bitcoin cash was given on the basis of how much bitcoin
does the individual owns in their wallet so if someone had 0.5 BTC in their wallet they were
given 0.5 BCH in their wallet.
In the case of some advanced Airdrops a network can take a snapshot of their blockchain at
an pre announced date and say that the wallet addresses whose balance is above let us
suppose 0.5 ether tokens will be eligible for the drop which ensures the network that it’s token
will be received by the people who are already invested in cryptocurrency which is most
relevant to the network.
To participate in an airdrop it is important to give the wallets address whose public and
private keys are stored by you rather than an exchange
Advantages of Airdrops
Airdrops are both beneficial to people and the project owners as value of a token can
appreciate after its public listing which can benefit the people who received the token for free
during the airdrop and it saves the project owners marketing cost as the success of any crypto
project highly depends on public excitement and sentiments of retail investors and Airdrop
can increase both awareness and excitement in people about their project and when people
will already have a certain amount of the new token in their wallet they are more likely to buy
more of it during the public listing and feel like they are also a part of the project and its

Disadvantages of airdrop
Some people see Airdrops as a part of a “pump and dump scheme” which can be used by an
organisation to increase the hype around their cryptocurrency to drive the prices up and
dump the majority of the cryptocurrency at a high price and bail out of the project.
Sometimes Airdrops can be used to collect public key of various wallets and to track their
transaction across various network in an attempt to deduce the user of that wallet and can
also be used for phishing schemes
It is best to Do Your Own Research of the project whose airdrop you are looking to
participate in and see that it is a credible project and has some valid people or VC’s behind
the project .
You can also join the community of the project where the developers of the project can
respond to your queries or you can read the white paper of the project which is released to
inform the people about the purpose of the project.

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