What Is an Airdrop in Cryptocurrency?
A crypto airdrop is a process of distributing free crypto coins or tokens to a large number of wallets. In this way, crypto projects send a small amount of new cryptocurrency to the wallets of active users for free or for a small service.
Airdrops are used by various crypto projects as a marketing strategy, as they allow to generate interest in the project, and excitement about the distribution of coins, stimulate the project’s activity, and even attract new investors. By announcing an airdrop, the project’s recognition and popularity continue to grow, attracting new users who also want to receive free crypto.
Interesting fact! The term airdrop itself comes from the traditional method of dropping various supplies from the air. In a similar way, crypto projects drop their “supplies” on active and involved users.
Most often, airdrops are given to loyal members of the project’s community who have supported it from the very beginning, as well as users who have completed the necessary criteria. Thus, the answer to the question “what is airdrop crypto” can be a fair and equal distribution of tokens among the community, which not only ensures user participation but also prevents tokens from being owned by only a few users.
How Airdrops Work
As mentioned, airdrops work by distributing a certain amount of coins or tokens among devoted followers and project participants. However, to qualify for a token distribution, users should follow the requirements set by the project.
Important! The requirements for receiving free crypto airdrop can vary: storing or trading a certain amount of project tokens, following social media accounts or attracting friends, promoting the project on social media, etc.
The process of distributing tokens can also vary: while some projects optimize the process using smart contracts, others do it manually. To receive an airdrop, it is important not only to fulfill all the conditions but also to promptly monitor the project news in case of changes.
Types of Airdrops
Token Airdrops
This category involves free token distribution to a large group of users. Users are usually selected based on certain project criteria, such as holding certain crypto at the time of a snapshot or completing certain tasks. The purpose of the token airdrops is to raise awareness, expand the user base, or reward active community members.
Forked Airdrops
This type of airdrop crypto occurs when a blockchain undergoes a hard fork, which results in the creation of a new blockchain and cryptocurrency. Thus, original crypto holders get the same amount of the new crypto on the new network. In other words, this type of airdrop rewards existing holders with new forked tokens.
Holder Airdrops
In this type of airdrop, tokens are distributed specifically to holders of a specific crypto or token. The distribution is based on a snapshot of the blockchain at a specific time, where wallets holding the said cryptocurrency receive a proportional amount of new tokens. This type of airdrop incentivizes users to hold on to their assets, thereby promoting stability and loyalty in the community.
Airdrop Process
While airdrops may vary slightly depending on the crypto project issuing the tokens, most of them include specific steps.
Steps Involved
- The crypto project announces the upcoming airdrop on its social networks, channels, and crypto communities. The project team also publishes detailed information and requirements for receiving the token.
- Community members and users who want to receive the airdrop register. This includes providing their wallet and other information, as well as fulfilling the requirements or tasks from the project.
- After the project team members verify the eligibility and validity of the participants, users can expect the token distribution. Shortly after, the tokens are distributed to the wallets of the participants under the rules of the specific airdrop.
Examples of Successful Airdrops
- Uniswap (UNI) Airdrop
In September 2020, Uniswap, one of the most famous DEXs, held one of the largest airdrops. The project sent 400 UNI tokens to every wallet that interacted with the platform before September 1, 2020. Thus, thousands of users received tokens worth several thousand dollars each at the time, which significantly increased user engagement and loyalty. Moreover, this airdrop also played an important role in decentralizing governance by distributing the tokens widely.
- Stellar (XLM) Airdrop
While Stellar has had several significant airdrops, there is one that made history. In 2018, Stellar conducted a joint airdrop in partnership with Blockchain.com, distributing $125 million worth of XLM tokens to Blockchain.com wallet users. This made it one of the largest airdrops by value and undoubtedly brought awareness to Stellar. It attracted new users to the platform, which increased the number of active wallets and transactions on the Stellar network.
Best Airdrops on Notum
Notum App offers users an “airdrop” tab that has information about numerous rumored and confirmed airdrops. Let’s take a look at the top 10 projects that are likely to release airdrops shortly.
Linea Voyage
Linea has launched the “Linea Voyage” program, which aims to provide a platform for users to complete weekly tasks and test the Testnet. Linea Surge is part of the Voyage, it is an LXP-based program that allows users to collect LXP-L in exchange for assets on Linea.
The Surge is expected to bring 2 airdrops to users, so it is important to keep up to date with the project’s news on their official channels.
- More Linea Voyage airdrop info on Notum
Scroll Marks
Scroll is an EVM-like ZK rollup that launched in early 2021 as part of the Ethereum ecosystem. While the project does not currently have a token, it is likely to launch one in the future. Scroll launched Scroll Sessions launched a points campaign, allowing users to earn points called marks for interacting with the platform, which will likely lead to getting an airdrop.
- More Scroll Marks airdrop info on Notum
Mode XP
Mode is a modular DeFi layer 2 that is building a superchain with Optimism. In April 2024, Mode officially confirmed the launch of its airdrop, which will distribute 550 million $MODE to new users.
To receive the airdrop, it is important to have past on-chain activity, interact with dApps in the ecosystem, bridge tokens to the Mode Network multiple times, and complete Galxe and Intract Quests and earn XP for them.
- More Mode XP airdrop info on Notum
Source: Notum
Renzo
Renzo protocol has announced 2 seasons of incentives that will allow users to receive an airdrop of the project. The first season ended on April 26, 2024, where the minimum requirement to participate was 360 ezPoints per wallet. The second season began immediately after the end of the first and represents 5% of the supply or 500M $REZ tokens. More detailed information about Season 2 can be found in the official Renzo documents.
- More Renzo airdrop info on Notum
Kelp Miles
Kelp DAO is one of the biggest liquid restaking protocols that confirmed the release of its $KELP token in May 2024. While the date is still unknown, users can already increase their chances of receiving the airdrop. To be eligible for the airdrop, participants must earn Kelp Miles points by purchasing and restaking ETH, stETH, xETH, or sfrETH.
- More Kelp Miles airdrop info on Notum
Swell Pearls
Swell Network is a fairly popular Ethereum staking protocol that also announced the creation of a native token, SWELL, in its documentation. To be eligible for the airdrop, users must participate in The Voyage program, where they can receive rewards in the form of “pearls” and exchange them for SWELL. It is also known that Swell will distribute coins to those who deposited funds in L2.
- More Swell Pearls airdrop info on Notum
Source: Swell Voyage
Karak
Karak Network is a versatile multi-chain restaking layer popular in the crypto world. The platform recently released the Karak XP program, which incentivizes users to participate in activities on the platform using Karak XP.
While Karak has not officially announced its own airdrop, restaking on the platform, earning Karak XP, and inviting friends will likely increase your chances of receiving an airdrop.
- More Karak airdrop info on Notum
KiloEx
KiloEx is a decentralized trading platform with increased security, which has already announced its airdrop. The platform's official website claims that to get tokens, you need to earn points on the platform. For example, users can get activity points for 7 days of trading on the platform, trading points, earn points, and referral points.
- More KiloEX airdrop info on Notum
Mendi LP
Mendi Finance is a DeFi lending protocol for attending various financial services. The protocol has its own loyalty program that allows users to earn Mendi loyalty points (or LP), which are needed to fairly distribute the potential Linea airdrop to its community.
- More Mendi LP airdrop info on Notum
Source: Mendi
Reya
Reya Network is a well-known layer 2 solution for DeFi trading, allowing users to earn XPs for depositing assets on the platform. Although there has been no official confirmation of the airdrop, there are rumors that the project may soon launch its own currency, and having XPs will help to be eligible for the airdrop.
- More Reya airdrop info on Notum
Pros and Cons of Crypto Airdrops
Pros:
- Project Recognition. Announcing an airdrop increases people's interest in the project and makes them excited to get cryptocurrency, thereby encouraging them to complete tasks, use the platform, and invite friends.
- Community Engagement. After the news about the airdrop, the project's community also becomes more active, wanting to increase the chance of receiving the distribution. Thus, the project's channels and social networks also grow and become more discussed.
- Rewarding Participants. An airdrop is a good opportunity to reward loyal community members and users who have fulfilled the necessary conditions. For crypto users, it is also a chance to get free tokens.
- Attracting Investors. Airdrops are often used by projects as a strategy to attract new investors, as the platform gains a new wave of popularity and recognition in the crypto community.
Cons:
- Security. Receiving an airdrop always involves connecting your crypto wallet for token distribution. If users connect their wallets to unsafe sites, this may lead to loss of funds.
- Not legitimate or low-quality project. Before participating in an airdrop, make sure that the project planning to distribute tokens is safe and recognized in the crypto community, otherwise, it may also be an attempt by attackers to obtain funds.
Conclusion
Airdrops certainly have a meaning for a crypto space, allowing projects to gain recognition, and attention, and create a boom around the platform. Airdrops also help incentivize existing community members and attract new users to the platform, which greatly increases its visibility.
However, it is important to research the project’s history and security level before claiming an airdrop, thus protecting both yourself and your finances.