What is token Airdrop? How to get Free Tokens?

What is token Airdrop? How to get Free Tokens?

Blockchain For Newbies
February 28, 2019 by Leo Webb
What is token Airdrop_ How to get free tokens-min

Crypto airdrops occur when blockchain startups and new cryptocurrency projects distribute their tokens for free. To receive an airdrop, you should have coins based on the required type of blockchain stored in your wallet. For example, if you have Bitcoins or Ethereum, you are eligible to receive other tokens, such as Byteball, OmiseGo, Stellar lumens, or any other cryptocurrency that is distributed using the airdrop method and is based on the same blockchain.

Most often, airdrops happen according to the following scenario. First, the project that offers free tokens announces the airdrop. When it’s time to make the airdrop, the project takes a snapshot of the blockchain, and anyone who holds BTC or ETH at this point receives a certain number of tokens for free. Although Bitcoin and Ethereum blockchains are used for airdrops most often, it’s also possible to make an airdrop on other types of blockchains.

Obviously, if you distribute your tokens among people who hold ETH or BTC, the number of these tokens will be quite impressive. Thus, small projects may not be able to make such massive airdrops, and they usually require you to go through a simple procedure to receive tokens. You may have to make posts on social media or to contact members of the team on a cryptocurrency forum, such as Bitcointalk. Most often, you will have to fill in an online form, providing your wallet address and email, as well as your Telegram and Twitter accounts. Such an approach is very popular among projects that use airdrops in their marketing campaigns. Keep in mind that your wallet should actually be active — you should use it, at least, sometimes. Many projects check the submitted wallets to make sure they were not just generated by someone to use multiple wallets for a single airdrop.

Why Are Airdrops Popular?

The first reason why new projects choose airdrops is that it’s an easy way to quickly distribute the total token supply. Such an approach allows for less centralization. If a project evenly distributes the whole supply of tokens, there will be no issues with bagholders holding the biggest share of tokens. However, many projects also use airdrops to distribute only a certain percentage of their coins to holders of Ethereum or Bitcoin, using the already well-distributed economy to make their coins more popular.

Some cryptocurrency projects use airdrops to reward their early investors and supporters who participated in their ICOs or bought their tokens at the very beginning. In this case, an airdrop can be a good motivation for the investors to hold their tokens for longer periods of time, seeing that the project is alive and rewarding.

Airdrops help raise awareness about a new coin or ICO. People who wouldn’t otherwise hold these tokens or even know about them get involved in the project. As a result, the price of the token grows, which is a common effect in economics and a very important feature of the cryptocurrency market. This is called the endowment effect — people tend to value some things just because they own them. In addition, when people already own some token, they are likely to purchase more in the future.

Obviously, free tokens are also a great method of marketing, as they allow projects to create a buzz around their new token. There are too many blockchain-related startups that appear here and there all the time, and many projects realize that they have to stand out in this market that is constantly crowded. Everybody likes to receive gifts, and airdrops allow new cryptocurrency projects to capitalize on this fact.

Real Cases of Airdrops

  • Polymath
    This is a blockchain-based platform aimed to work as an interface between a blockchain and traditional financial securities. The platform was created to simplify the legal processes associated with selling and creating security tokens. Polymath also introduced a new standard of tokens (ST20) that can be owned only by certain authorized investors.
    The Polymath Airdrop quickly received more than 40,000 applications from different countries. The team behind the project didn’t expect such interest so they had to increase the number of tokens. On February 1st, 2018, Polymath tweeted about distributing 9,556,000 tokens to 38,224 holders. All participants should complete KYC/AML processes to make sure there are no bots participating in the airdrop.
  • Hydrogen
    This project was created for enterprises and developers in the financial sector. Its main purpose is to simplify the interactions of public systems with public blockchains. The combination of public and private models enable financial services to manage the dynamics of a transparent distributed ledger. The main goals of the project are identity management, validation, document security, and artificial intelligence.
    On February 16th, 2018, the Hydrogen company distributed 2,632,330,741 tokens. There were 25 thousands of early developers who were considered eligible to obtain a minimum of 222,222 HYDRO. What makes these tokens different from many others is that you cannot buy them in a sale. The team stated that they are not going to initiate new airdrops, and this distribution is final.
  • eBTC
    eBitcoin is a version of Bitcoin based on the Ethereum blockchain. It is compatible with the ERC20 standard. This project was aimed to put together the best features of both cryptocurrencies, offering fast transactions and compatibility with smart contracts.
    eBTC tokens were distributed among sign-up participants on September 30th, 2017. The project has distributed as much as 95% of the total supply of tokens during the airdrop (19,950,000). However, since then, the price of eBTC tokens has decreased by $0.01.
  • Decred
    Decred is a blockchain-based project intended to introduce a completely autonomous cryptocurrency and to prioritize decentralized governance. The airdrop sign-up period lasted 34 days, with people from 99 countries participating. After participants introduced seeds generated by them that were saved into a wallet, each one of them received about 258.93958076 DCR. The campaign ended in January 2016, and 3,244 applicants have completed the confirmation process successfully.
    The complex verification process included an investigation of email addresses and IP addresses aimed to detect any suspicious similarities. The whole process was carried out manually, and the Decred team did its best to reward each participant as much as possible.

Where to Track Airdrops

There are many websites where you can learn about the latest cryptocurrency airdrops so that you can quickly apply and get your free tokens. Here are a few most popular trackers: