What is Airdrop exactly ?

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3 Feb 2024

Airdrop here, airdrop there, airdrop over there... Wherever I look recently, I keep encountering the word 'Airdrop' !

Most newcomers to the crypto jungle don't exactly know what it means, what it's used for, and what the heck I'll get out of it? Questions trigger one after the other. Let's dive into the Airdrop topic and bring out its pros and cons for our new friends in crypto.

The concept of airdrop, which has been frequent in the crypto world since the existence of cryptocurrencies, has become an effective promotional method for many cryptocurrencies.

Airdrop is the distribution of new cryptocurrencies to the market for free or under certain conditions. The aim here is to introduce the new currency to people and create activity in the project ecosystem. You can think of the airdrop system as a way for brands to advertise their new products or run promotions. Despite advertisements, there is a possibility that the products may not sell, just as cryptocurrencies may not enter the market despite airdrops. Nevertheless, using this system remains an attractive option for cryptocurrency creators.

How to Get an Airdrop ?

Frens, we always say that " the crypto world requires keen interest and follow-up." This is also true for benefiting from airdrops. You need to follow the websites of all existing coins and platforms where cryptocurrency developments are shared. If a coin is going to fork or a new altcoin is going to be released, it will announce it on its own website first. The conditions required for the airdrop are also announced here, and applications are opened. Those who meet the conditions are directed, and as a result, they benefit from the Airdrop.

If you have a significant presence in the crypto world or a large number of followers on social media (for those who share posts in this field), you may have a chance to benefit from airdrops without any cost. Typically, coin managers directly reach out to these individuals.

How Can You Participate in Airdrop Events on Exchanges ?

Exchanges can distribute their own cryptocurrencies and cryptocurrencies they have partnered with to promote and increase their usage through airdrops and different methods. Users usually do not receive news by mail, so it is good for users to check for news about the distribution of cryptocurrencies on exchanges and where the distributions are made in their accounts.

In some cases, exchanges may ask users to participate in airdrop events using different methods. In this case, we recommend reading articles explaining how to participate in airdrops written by exchanges.

How Can You Make a Profit from Airdrops ?

Cryptocurrencies implement airdrops for various platforms before they are released to the market. It is recommended to subscribe to websites that follow airdrop news first. After subscribing, it is recommended to enter the mailing lists of certain sites and receive news via emails. If you receive airdrop notifications from certain sites, they generally publish technical documents explaining the features of their cryptocurrencies and how they will be used. After reading the technical documents, you can participate in airdrop events of projects you like.

However, it should be noted that the amount of cryptocurrency given to participants in airdrops is generally small, so increasing the amount depends on your efforts. The evolving crypto ecosystem has also made airdrop tracking easier. While airdrops used to be followed through mail and newsletters, they can now be followed through social media.

The announcement of an airdrop by a crypto project on social media is quickly discovered with the interaction of relevant individuals. Therefore, users who will follow airdrops should follow social media accounts referred to as airdrop hunters.

If There Are Conditions to Earn Airdrops, What Could They Be ?

Earning airdrops does not always happen easily. Previously, crypto projects conducted airdrops without imposing any conditions to acquire users. The increasing number of users and volume in the cryptocurrency market has led new projects to different methods. Many crypto initiatives began to demand that users fulfill certain conditions before conducting an airdrop.

The most common airdrop condition is staking. Cryptocurrency projects have started to airdrop cryptocurrencies to those who stake certain cryptocurrencies on their own blockchain or on trending blockchains. This situation, which started in the middle of 2023, turned into a major trend in 2024.

Especially, the distribution of Celestia (TIA) airdrop to those who stake Cosmos (ATOM) caused a great impact on the crypto market. The distribution of Celestia, a modular blockchain, to ATOM stakers activated many projects. Following Celestia, crypto projects that started to move distributed airdrops to those who stake ATOM, INJ, and TIA. This trend grew so much in 2024 that investors recently started to focus on stake-oriented transactions.

Another airdrop condition could be to transact on the blockchains or ecosystems of crypto projects that may conduct airdrops. For example, if a project named A Coin announces an airdrop and does not disclose the conditions, crypto investors can actively transact in A Coin's ecosystem. They can try methods such as trading or adding liquidity in the DeFi (decentralized exchange) sector. In this context, they can also turn to the NFT side if these projects have NFTs.

In addition to all of these, crypto investors can also earn airdrops by earning points. Various platforms such as Galxe carry out the task-reward mechanism for projects they collaborate with. And Zealy is another famous platform in this category. Thus, tasks determined by projects and rewards to be given in return are presented to crypto investors. Points are earned for each task performed in projects, and these points are converted into airdrop rights in the future.

Crypto Projects that Conduct Airdrops Arbitrum (ARB), Aptos (APT), and Optimism (OP) entered the cryptocurrency market by conducting airdrops in 2023 and caused a great impact. These projects became the leading names of the airdrop frenzy. Before 2023, there were not many airdrops, but during this period, there was a significant explosion, and successive airdrop news started to come from projects that would enter the cryptocurrency market.

The latest airdrop in the sector came from Jupiter Exchange (JUP) in the Solana ecosystem. Jupiter carried out a JUP airdrop for those who actively use its ecosystem and make at least one transaction on its decentralized exchange. Jupiter Exchange allocated $800 million to its highly acclaimed airdrop.

Before Jupiter, one of the first projects to emerge will be AltLayer. The AltLayer team conducted an airdrop for those who stake ETH in its ecosystem and contribute to network activity.

Even Binance had done a short-term launcpool campaign related to AltLayer a couple of days ago and I got some ALT tokens thanks to BNB coins I have. Additionally, AltLayer announced that it will conduct an airdrop for those who stake Celestia (TIA).

Dymension, created with Cosmos SDK and gained popularity quickly, completed its airdrop distribution. The popular crypto project distributed airdrops to those who actively participate in the ecosystem, contribute to network operations, and stake certain cryptocurrencies.

What Are the Risks of Airdrops ?

Since airdrops are promotional activities before cryptocurrencies are released to the market, no money is paid, or payments are made for certain transactions to fulfill the conditions. However, you may be asked to share your wallet information to participate in airdrops. Other risks include problems in the project, failure to provide a good return, and failure to be listed on exchanges. The worst-case scenario is projects turning into Ponzi schemes and encountering problems with regulators.

How Can We Prevent Airdrop Risks ?

I recommend thoroughly researching projects, including cryptocurrencies, as all investment activities, including investing in cryptocurrencies, involve risks. Additionally, closely following projects' technical documents, developments, and social media accounts. After thoroughly researching projects, I recommend investing and then closely monitoring developments. This way, you will have a chance to minimize risks.

Are Airdrops Risky or Profitable ?

As with everything, there are risks and gains here. The coins that come to you as gifts can increase significantly over time. You can earn a profit from something you own without investing. Perhaps, after entering the exchange, you can buy different coins using the given coins. This can further increase your profit. Later, you can convert your investments into fiat currency or keep them in your crypto wallet; the choice is yours!

In addition to the nice scenarios, the money you earn from airdrops may not increase in value at all or may not even enter the exchange. However, if we look at it realistically, this situation may not be defined as a loss. That is, it can also be considered as the continuation of something that was never yours in the first place.

The worst-case scenario you will experience with airdrops will not go beyond this. There is also a small chance of another risk: Fraud.

People who try to misuse the crypto exchange for bad purposes can trap you through this method. Make sure you find the official websites of the coins and do not neglect to look at local and foreign sources to confirm the information you find. As long as you pay attention to this, there will be no risky situation.

Conclusion

Although airdrops are a great promotional method for cryptocurrencies, they pose high risks for both users and project shareholders. To participate in airdrops, I recommend subscribing to the mailing lists of airdrop tracking sites and following them. If you are well-known in the cryptocurrency field, many project managers will contact you to benefit from airdrop campaigns free of charge. However, since airdrops pose potential risks, I recommend conducting detailed research before participating in projects.

By the way.... maybe do a little browsing on their YouTube channels and you can get more detailed information from the videos some influencers have shared about specific cryptocurrency airdrops! :)

And lastly... Be awake and always DYOR for each airdrop too ! :)

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