History of Crypto Airdrop

Have you ever heard of Airdrop in crypto? why do developers give free cypto to the community? does it not make them lose?

If you are an active person in Crypto, especially WEB 3.0, surely the term airdrop is not something foreign, because many projects in web 3 are airdropping to their ecosystem Tokens or even other assets like NFTs, this raises the question of what exactly is their goal of giving airdrops? before I explain further, wouldn't it be good for you to know the history of crypto Airdrop first.

What is Crypto Airdrop?

As reported by wikipedia.org, Airdrop is the distribution of cryptocurrency tokens or coins, usually for free, to various cryptocurrency wallet addresses. Airdrops can be implemented as a way to gain new attention and followers, resulting in a larger user base and wider coin payouts.

So airdrop is the distribution of token supply from developers to the communities in their ecosystem, in the hope that their tokens can become liquid and people who want to buy their tokens do not have difficulties due to the limited supply circulating in the market.

History of Airdrop

Airdrop was first used by the Auroracoin on March 25, 2014. Over time, in 2017 this strategy became increasingly popular in the cryptocurrency community looking to expand its project community. Due to the effectiveness of this strategy, many of the current promotional activities seem undesirable/spammy or fraudulent. Because of this bad reputation, many social networks, especially Facebook, now refuse to allow ads promoting various electronic money such as cryptocurrencies.
( Source, https://id.wikipedia.org/wiki/Airdrop )

What is the function of Airdrop?

This airdrop has a function for marketing strategies to make the community more familiar with a crypto project that will be launched. By giving away cryptocurrency for free, it is hoped that the brand awareness of traders will increase. in other words, this can be a marketing tool for crypto projects to introduce their tokens not only to the community but to the public. In addition to introducing their tokens, airdrops can also introduce products from their projects and people can try the products they make such as Dapps, or their Blockchain in the hope that their products can be famous and people do not doubt their products.

For example, I created a Defi project called PANGRANGO DEFI, I plan to launch a token in the near future called Pangrango Token, to make my token famous I created an Airdrop event, this airdrop can be followed by everyone on the condition that they have to make transactions in PANGRANGO DEFI such as Token Swap, add liquidity or use other features in Pangrango Defi.

This makes people make transactions on Pangrango Defi which results in increased transactions on my Defi, plus more people who participate in this event more people who know Pangrango Defi and they become accustomed to using Pangrango Defi and this allows those who initially came only for airdrops to turn into regular users of Pangrango Defi because they are used to and trust Pangrango Defi.

But there are also projects that distribute airdrops based on transaction history, that is, we take an example from the Arbitrum Airdrop some time ago, the Arbritum Foundation distributes their tokens to people who have made transactions on their network. This is called community airdrop or people call it retro active airdrop where you will be eligible to get airdrops based on your activity on the blockchain.

Retro Active Airdrop is usually used by Layer-2 Blockchain projects, this type of airdrop does not have a complex task, the main task is that you must be active on their network or make smart contract calls whether it is buying NFTs, interacting with Dapps and other things that can be done on their network.

The function of this Airdrop has a huge impact on the network, by holding a retro active airdrop, it is certain that the TVL in the blockchain will increase rapidly, you can see the transactions from the Zksync blockchain, their TVL is almost even equal to their L1 Blockchain, Ethereum, even though Zksync never said they would share airdrops but it is customary that Layer 2 Blockchains will definitely do retro activ airdrops, this is what makes the community busy doing Tx on the Zksync Blockchain.

So Airdrop has a very important function in the Crypto industry, if other industries are marketing by advertising and collaborating, in the crypto industry Airdrop is the main and most preferred markering technique by the community or project owners because everyone benefits from this marketing strategy.

Airdrop is a marketing strategy born from the rapid development of the crypto industry, upholding the principle of win win solutions where business owners and customers benefit from this strategy.

Best Regards. Pangrango