Crypto Airdrop
August 25, 2023

Many have heard the phrase cryptoairdrop, and many have seen this tab often, but still don’t know what cryptoairdrop is or what it’s even for?

We want to share with you all the information about airdrop in this article.

What Is a Cryptocurrency Airdrop?

A cryptocurrency airdrop is a marketing campaign in which a cryptocurrency project distributes its tokens free of charge to existing cryptocurrency holders or to users who meet certain criteria. Airdrops are often used to raise awareness of a new project, reward early adopters, or grow the user base.

To participate in an airdrop, you typically need to have a cryptocurrency wallet and meet the eligibility criteria set by the project. This may involve holding a certain amount of the project’s native token, following the project on social media, or completing a simple task, such as signing up for a newsletter.

Once you have met the eligibility criteria, the airdrop tokens will be deposited into your wallet. The value of airdrop tokens can vary, but they can sometimes be worth a significant amount of money. For example, the 2021 airdrop of the cryptocurrency APECoin (APE) saw the distribution of over 100 million tokens, which were worth over $3 billion at the time.

While airdrops can be a great way to get free cryptocurrency, it is important to do your research before participating in any airdrop. Some airdrops are scams, and there is always the risk that the value of the tokens you receive will go down.

The types of airdrops:

Holder airdrops: These airdrops are given to holders of a particular cryptocurrency. This is a common way for projects to reward early adopters and encourage community growth.
Referral airdrops: These airdrops are given to people who refer new users to a project. This is a way for projects to grow their user base and spread awareness.
Task-based airdrops: These airdrops are given to people who complete a certain task, such as following the project on social media or signing up for a newsletter. This is a way for projects to get people excited about their project and generate buzz.

If you are interested in participating in airdrops, there are a few things you can do to increase your chances of success:

Follow crypto news and airdrop websites: This will help you stay up-to-date on the latest airdrops and learn about the eligibility criteria.

Hold a variety of cryptocurrencies: This will increase your chances of being eligible for more airdrops.

Be active on social media: Many airdrops require you to be active on social media, so make sure you are following the projects you are interested in and interacting with their community.

Be patient: Airdrops can take time to be distributed, so don’t expect to get your tokens right away.

Airdrops can be a great way to get free cryptocurrency, but it is important to do your research and be aware of the risks before participating.

Types of Crypto Airdrops

And now we will learn in more detail what types of crypto airdrops there are, which are the most popular, and what are the features of each type.

Here are some of the most common types of crypto airdrops, with a bit more detail about each one:

Holder airdrops: These airdrops are given to holders of a particular cryptocurrency. This is a common way for projects to reward early adopters and encourage community growth. For example, the 2021 airdrop of the cryptocurrency APECoin (APE) saw the distribution of over 100 million tokens, which were worth over $3 billion at the time.

Referral airdrops: These airdrops are given to people who refer new users to a project. This is a way for projects to grow their user base and spread awareness. For example, the airdrop for the cryptocurrency STEPN (GMT) required users to refer 10 new users in order to be eligible.

Task-based airdrops: These airdrops are given to people who complete a certain task, such as following the project on social media or signing up for a newsletter. This is a way for projects to get people excited about their project and generate buzz. For example, the airdrop for the cryptocurrency Lucky Block (LBLOCK) required users to complete a series of tasks, such as retweeting a tweet and joining the project’s Discord server.

Bounty airdrops: These airdrops are given to people who perform specific tasks, such as creating content, translating documents, or reporting bugs. This is a way for projects to get help from the community and improve their products. For example, the airdrop for the cryptocurrency Helium (HNT) required users to participate in the project’s testnet.

Hard fork airdrops: These airdrops occur when a new cryptocurrency is created as a result of a hard fork in the blockchain of an existing cryptocurrency. The holders of the original cryptocurrency are often airdropped tokens of the new cryptocurrency. For example, the airdrop for the cryptocurrency Bitcoin Cash (BCH) saw the holders of Bitcoin (BTC) airdropped an equal amount of BCH.

Raffle airdrops: These airdrops are like lotteries, where participants are randomly selected to receive tokens. This is a way for projects to give back to the community and reward lucky users. For example, the airdrop for the cryptocurrency Axie Infinity (AXS) involved a raffle where 10,000 users were randomly selected to receive tokens.

These are just some of the most common types of crypto airdrops. There are many other variations, and new types of airdrops are being created all the time.

It is important to do your research before participating in any airdrop. Some airdrops are scams, and there is always the risk that the value of the tokens you receive will go down. However, if you are careful and choose your airdrops wisely, you can potentially get free cryptocurrency that could be worth a lot of money in the future.

Here are some tips for finding and participating in safe and legitimate airdrops:

  • Only participate in airdrops from projects that you trust. Do some research on the project and make sure that it is legitimate.
  • Beware of airdrops that require you to provide personal information or money. Legitimate airdrops will never ask for this information.
  • Only participate in airdrops that have a clear and transparent eligibility criteria. Avoid airdrops that are vague or unclear about how to participate.
  • Be patient. Airdrops can take time to be distributed. Don’t expect to get your tokens right away.

By following these tips, you can increase your chances of participating in safe and legitimate airdrops.

Crypto Airdrop Process

The process of a crypto airdrop can vary depending on the project, but there are some common steps involved:

  • The project announces the airdrop and sets the eligibility criteria. This may involve holding a certain amount of the project’s native token, following the project on social media, or completing a simple task, such as signing up for a newsletter.
  • The project creates a list of eligible participants. This list is usually generated automatically based on the eligibility criteria.
  • The project sends the airdrop tokens to the eligible participants’ wallets. This can be done manually or automatically.
  • The participants can then sell, hold, or use the airdrop tokens as they see fit.

The things you can do to increase your chances of participating in a crypto airdrop:

Follow crypto news and airdrop websites: This will help you stay up-to-date on the latest airdrops and learn about the eligibility criteria.

Hold a variety of cryptocurrencies: This will increase your chances of being eligible for more airdrops.

Be active on social media: Many airdrops require you to be active on social media, so make sure you are following the projects you are interested in and interacting with their community.

Be patient: Airdrops can take time to be distributed, so don’t expect to get your tokens right away.
It is important to do your research before participating in any airdrop.

Crypto Airdrop Scams

Crypto airdrop scams are a type of cryptocurrency scam that involves sending unsolicited tokens to people’s wallets. The scammers then hope that the recipients will be curious about the tokens and will visit a malicious website in order to claim them.

Here are some common ways that crypto airdrop scams work:

  • The scammers create a fake website and social media accounts for the project. They then send tokens to people’s wallets and hope that the recipients will visit the fake website in order to claim them. Once the victim visits the fake website, they are asked to provide their personal information or cryptocurrency. The scammers then use this information to steal the victim’s funds.
  • The scammers send a token to the victim’s wallet that gives the scammers permission to transfer other tokens out of the wallet. The victim is then tricked into approving the token, and the scammers then steal their cryptocurrency.
  • The scammers create a fake airdrop campaign that looks like it is from a legitimate project. They then send out emails or social media messages to people, urging them to participate in the airdrop. Once the victim clicks on the link in the email or message, they are taken to a malicious website that steals their personal information or cryptocurrency.

It is important to be aware of these scams and to take steps to protect yourself. Here are some tips for avoiding crypto airdrop scams:

  • Only participate in airdrops from projects that you trust. Do some research on the project and make sure that it is legitimate.
  • Beware of airdrops that require you to provide personal information or money. Legitimate airdrops will never ask for this information.
  • Only participate in airdrops that have a clear and transparent eligibility criteria. Avoid airdrops that are vague or unclear about how to participate.
  • Never give out your private keys or seed phrases. These are the keys to your cryptocurrency wallets, and anyone who has them can access your funds.
  • Be suspicious of any airdrop that seems too good to be true. If it sounds too good to be true, it probably is.

By following these tips, you can help protect yourself from crypto airdrop scams.

Crypto Airdrops and Taxes

The tax treatment of crypto airdrops varies depending on the country or jurisdiction. In the United States, the Internal Revenue Service (IRS) considers airdrops to be taxable events. This means that you will have to pay taxes on the fair market value of the tokens you receive at the time you receive them.

The IRS has not issued specific guidance on how to calculate the fair market value of airdropped tokens.

However, you can use the following methods to estimate the fair market value:

The price of the token on a cryptocurrency exchange: If the token is traded on a cryptocurrency exchange, you can use the price of the token on the exchange at the time you receive it to estimate the fair market value.
The price of a similar token: If the token is not traded on a cryptocurrency exchange, you can use the price of a similar token that is traded on an exchange to estimate the fair market value.
The value of the underlying asset: If the token is backed by an underlying asset, such as a cryptocurrency or fiat currency, you can use the value of the underlying asset to estimate the fair market value.

Once you have estimated the fair market value of the tokens you receive, you will need to report them as income on your tax return. You will also need to pay taxes on any gains you realize when you sell the tokens.

It is important to note that the tax treatment of crypto airdrops can change, so it is important to consult with a tax advisor to get the latest guidance.

Here are some additional things to keep in mind about crypto airdrops and taxes:

  • The tax treatment of airdrops may be different for other countries or jurisdictions. It is important to check with your local tax authorities to find out how airdrops are taxed in your country.
  • You may have to pay taxes on airdrops even if you do not sell the tokens. This is because the IRS considers airdrops to be taxable events, regardless of whether you sell the tokens or not.
  • You may be able to deduct the cost of acquiring the tokens from your taxes. This is the case if you purchased the tokens or if you incurred costs to acquire them, such as transaction fees.
  • It is important to understand the tax implications of crypto airdrops before participating in any airdrop. By doing your research and consulting with a tax advisor, you can help ensure that you are compliant with the law.

Advantages and Disadvantages of Cryptocurrency Airdrops

Advantages:

Free cryptocurrency: Airdrops are a way to get free cryptocurrency, which can be a great way to start your crypto portfolio or add to an existing one.

Increased awareness: Airdrops can help to increase awareness of a new cryptocurrency project. This can be beneficial for the project, as it can help to attract new users and investors.

Rewarding early adopters: Airdrops can be used to reward early adopters of a cryptocurrency project. This can help to encourage people to support the project and help it to grow.

Building a community: Airdrops can be used to build a community around a cryptocurrency project. This can be beneficial for the project, as it can help to create a sense of excitement and engagement around the project.

Disadvantages:

Risk of scams: There are many scams involving cryptocurrency airdrops. It is important to do your research before participating in any airdrop to avoid being scammed.

Uncertain value: The value of airdropped tokens is uncertain. It is possible that the tokens will be worth nothing, or they could be worth a lot of money in the future.

Tax implications: In some countries, airdrops may be considered taxable events. This means that you may have to pay taxes on the value of the tokens you receive.

Requires effort: Airdrops often require you to complete certain tasks, such as following the project on social media or holding a certain amount of the project’s native token. This can be time-consuming and inconvenient.

Overall, cryptocurrency airdrops can be a great way to get free cryptocurrency and support new projects. However, it is important to be aware of the risks involved and to do your research before participating in any airdrop.

Does crypto airdrop make money?
Does crypto airdrop make money?

Crypto Airdrops vs. Initial Coin Offerings (ICO)

Crypto airdrops and initial coin offerings (ICOs) are both ways for cryptocurrency projects to raise money. However, there are some key differences between the two.

Airdrops are a way for cryptocurrency projects to distribute their tokens for free to existing cryptocurrency holders or to users who meet certain criteria. This can be a way to raise awareness of a new project, reward early adopters, or grow the user base.

ICOs are a way for cryptocurrency projects to raise money by selling their tokens to investors. This can be a way to raise funds for development, marketing, or other expenses.
Overall, airdrops are a lower-risk way to get involved in a cryptocurrency project. However, the value of the tokens you receive is uncertain. ICOs are a higher-risk way to invest in a cryptocurrency project, but there is the potential for higher returns.

Here are some additional things to keep in mind about airdrops and ICOs:

Airdrops are not always free. Some airdrops require you to complete certain tasks, such as following the project on social media or holding a certain amount of the project’s native token.

ICOs are not always successful. Many ICOs have failed, and investors have lost money.

It is important to do your research before participating in any airdrop or ICO. Make sure you understand the risks involved and that the project is legitimate.

FeatureAirdropICO
TypeFreeInvestment
Token DistributionFree to existing holders or users who meet certain criteriaPurchased by investors
PurposeRaise awareness, reward early adopters, or grow user baseRaise funds for a new cryptocurrency project
RisksScams, value of tokens is uncertainLoss of investment, fraud

Real-World Examples

Here are some real-world examples of cryptocurrency airdrops:

Uniswap: In 2020, Uniswap airdropped 400 UNI tokens to users who had interacted with the Uniswap protocol before September 1, 2020. The airdrop was worth over $1,000 at the time.

The Sandbox: In 2021, The Sandbox airdropped SAND tokens to users who had held LAND, the project’s native token, before December 17, 2020. The airdrop was worth over $100,000 at the time.

Axie Infinity: In 2021, Axie Infinity airdropped AXS tokens to users who had played the game before November 1, 2021. The airdrop was worth over $1 million at the time.

Solana: In 2021, Solana airdropped SOL tokens to users who had held SOL before April 1, 2021. The airdrop was worth over $100 million at the time.

Polygon: In 2022, Polygon airdropped MATIC tokens to users who had held MATIC before October 20, 2021. The airdrop was worth over $100 million at the time.

These are just a few examples of real-world cryptocurrency airdrops. There have been many other airdrops over the years, and there will be many more in the future.

What Was the First Crypto Airdrop?

The first cryptocurrency airdrop was the Auroracoin airdrop in 2014. Auroracoin was a cryptocurrency project that was designed to be the national cryptocurrency of Iceland. Every Icelandic citizen with a permanent resident ID was given 31.8 AUR.

The Auroracoin airdrop was a way to raise awareness of the project and to encourage people to use it. It was also seen as a way to give back to the Icelandic community.

The Auroracoin airdrop was not without its problems. Some people complained that they did not receive their tokens, and there were also concerns about the security of the project. However, the airdrop was ultimately a success, and Auroracoin is still in existence today.

Since the Auroracoin airdrop, there have been many other cryptocurrency airdrops. Some of the most notable airdrops include the Uniswap airdrop in 2020, the The Sandbox airdrop in 2021, and the Axie Infinity airdrop in 2021.

Airdrops have become a popular way for cryptocurrency projects to raise awareness and to reward early adopters. However, it is important to be aware of the risks involved in airdrops, and to only participate in airdrops from projects that you trust.

How do crypto airdrops work?
How do crypto airdrops work?

What Is an NFT Airdrop?

An NFT airdrop is a marketing campaign in which a non-fungible token (NFT) project distributes its tokens for free to existing NFT holders or to users who meet certain criteria. This can be a way to raise awareness of a new project, reward early adopters, or grow the user base.

To participate in an NFT airdrop, you typically need to have an NFT wallet and meet the eligibility criteria set by the project. This may involve holding a certain amount of the project’s native token, following the project on social media, or completing a simple task, such as signing up for a newsletter.

Once you have met the eligibility criteria, the NFT airdrop tokens will be deposited into your wallet. The value of NFT airdrop tokens can vary, but they can sometimes be worth a significant amount of money. For example, the 2021 airdrop of the NFT project Bored Ape Yacht Club (BAYC) saw the distribution of over 10,000 NFTs, which were worth over $300 million at the time.

While NFT airdrops can be a great way to get free NFTs, it is important to do your research before participating in any airdrop. Some airdrops are scams, and there is always the risk that the value of the tokens you receive will go down.

Here are some tips for finding and participating in safe and legitimate NFT airdrops:

Only participate in airdrops from projects that you trust. Do some research on the project and make sure that it is legitimate.

Beware of airdrops that require you to provide personal information or money. Legitimate airdrops will never ask for this information.

Only participate in airdrops that have a clear and transparent eligibility criteria. Avoid airdrops that are vague or unclear about how to participate.

Be patient. NFT airdrops can take time to be distributed. Don’t expect to get your tokens right away.

By following these tips, you can increase your chances of participating in safe and legitimate NFT airdrops.

Did the Country of El Salvador Do a Bitcoin Airdrop?

Yes, the country of El Salvador did a Bitcoin airdrop in September 2021. The government airdropped $30 worth of Bitcoin (BTC) to every adult citizen who had registered for a Chivo wallet, the official Bitcoin wallet of El Salvador.

The airdrop was part of the government’s efforts to promote the adoption of Bitcoin as legal tender in the country. The government hoped that the airdrop would encourage people to download the Chivo wallet and start using Bitcoin.

The airdrop was a success, with over 2 million people registering for Chivo wallets. The government has since said that it is considering doing another airdrop in the future.

However, there have also been some concerns about the airdrop. Some people have argued that it is unfair to give free Bitcoin to some people while others have to buy it. Others have also argued that the airdrop could lead to increased crime and speculation in Bitcoin.

Overall, the Bitcoin airdrop in El Salvador was a significant event. It is still too early to say what the long-term impact of the airdrop will be, but it is clear that it has helped to raise awareness of Bitcoin in the country.

How Do I Find Crypto Airdrops?

Follow crypto news and airdrop websites: There are many websites that track crypto airdrops. These websites will usually list the airdrops that are currently available, as well as the eligibility criteria.

Some of the most popular airdrop websites include:

  • Airdrops.io
  • Airdrop Alert
  • CoinMarketCap
  • Publish0x

Join crypto airdrop Discord servers: Many crypto projects have Discord servers where they announce airdrops and other events. Joining these servers can be a great way to stay up-to-date on the latest airdrops.

Follow crypto projects on social media: Many crypto projects announce airdrops on their social media channels. Following these channels can be a great way to be the first to know about new airdrops.

Use airdrop hunting tools: There are a number of airdrop hunting tools available that can help you find airdrops. These tools usually scan the blockchain for new airdrops and notify you when they are found.

Some of the most popular airdrop hunting tools include:

  • AirdropBot
  • Airdrop Hunter
  • Airdrop Alerts

When looking for crypto airdrops, it is important to be careful and to avoid scams. There are many fake airdrops that are designed to steal your cryptocurrency.

Here are some tips for avoiding crypto airdrop scams:

Only participate in airdrops from projects that you trust. Do some research on the project and make sure that it is legitimate.

Beware of airdrops that require you to provide personal information or money. Legitimate airdrops will never ask for this information.

Only participate in airdrops that have a clear and transparent eligibility criteria. Avoid airdrops that are vague or unclear about how to participate.

Can You Make Money From Crypto Airdrops?

Yes, you can make money from crypto airdrops. However, it is important to note that there is no guarantee that you will make money from an airdrop. The value of the tokens you receive can go up or down, and there is always the risk that the project will fail.

Here are some tips for making money from crypto airdrops:

  • Only participate in airdrops from projects that you believe in. This will increase the chances that the project will be successful and that the value of the tokens you receive will go up.
  • Do your research on the project before participating. This will help you understand the project and the risks involved.
  • Only participate in airdrops that have a clear and transparent eligibility criteria. This will help you avoid scams.
  • Be patient. Airdrops can take time to be distributed. Don’t expect to get rich quick.

By following these tips, you can increase your chances of making money from crypto airdrops.

Here are some examples of airdrops that have turned out to be very profitable:

Uniswap: In 2020, Uniswap airdropped 400 UNI tokens to users who had interacted with the Uniswap protocol before September 1, 2020. The airdrop was worth over $1,000 at the time.

The Sandbox: In 2021, The Sandbox airdropped SAND tokens to users who had held LAND, the project’s native token, before December 17, 2020. The airdrop was worth over $100,000 at the time.

Axie Infinity: In 2021, Axie Infinity airdropped AXS tokens to users who had played the game before November 1, 2021. The airdrop was worth over $1 million at the time.

These are just a few examples of airdrops that have turned out to be very profitable. However, it is important to note that these are just a few examples, and there are many airdrops that have not been profitable.

What accounts do I need for Airdrop?

It depends on what the conditions are for participating in the token giveaway, most commonly Twitter accounts, Instagram or Discord accounts.

The Bottom Line

The bottom line is that crypto airdrops can be a great way to get free cryptocurrency, but it is important to be aware of the risks involved. There are many scams out there, and there is no guarantee that the value of the tokens you receive will go up.

Here are some key takeaways from our discussion:

Crypto airdrops are a marketing campaign in which a cryptocurrency project distributes its tokens for free to existing cryptocurrency holders or to users who meet certain criteria.

Airdrops can be a way to raise awareness of a new project, reward early adopters, or grow the user base.

There are many scams involving cryptocurrency airdrops. It is important to do your research before participating in any airdrop to avoid being scammed.

The value of airdropped tokens is uncertain. It is possible that the tokens will be worth nothing, or they could be worth a lot of money in the future.

By following these tips, you can increase your chances of participating in safe and legitimate crypto airdrops.

Also, don’t forget to buy accounts from us to increase your chances in cryptocurrency giveaways.

Useful video about airdrops

Video: What Is a Crypto Airdrop and How Does It Work?