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Different Types of Crypto Airdrops and How to Find Them

By Brian Nibley · April 05, 2021 · 5 minute read

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Different Types of Crypto Airdrops and How to Find Them

A crypto airdrop is sort of like receiving a coupon to get a sample of something for free. New shops or restaurants sometimes offer a free drink or small item to first-time customers, for example. The hope is that the people who receive free items or coupons will enjoy the service, tell their friends, and become long-time customers.

When a company airdrops crypto to users, they aim to accomplish something similar. By depositing free coins into the wallets of users, the company is betting that the users might spread word of the new project and its potential use cases.

Of course, as with anything crypto-related, there’s more to it than just getting a simple “freebie” out of nowhere. This article offers answers to the most common questions regarding crypto airdrops, including:

•   What is a Crypto Airdrop?
•   What Are the Different Types of Airdrops?
•   How Do I Get Airdrops from Crypto?
•   Are Crypto Airdrops Worth It?
•   Are Crypto Airdrops Safe?

Recommended: Crypto Guide for Beginners

What is a Crypto Airdrop?

In a crypto airdrop, a new crypto project gives cryptocurrency to new users for free, or in exchange for a simple task like sharing a social media post. This practice became popular during the initial coin offering (ICO) craze of 2017 and 2018. Many crypto projects used airdrops to promote their ICOs and spark enthusiasm about their new digital asset.

In addition to regular coins, governance tokens are also sometimes airdropped, giving early adopters a larger say in how a project will develop going forward.

For users, the appeal is simple: Crypto airdrops allow people to obtain tokens without having to buy cryptocurrency. And for the companies, the benefit is clear: People who otherwise would never have known about the project could wind up becoming investors, or at the very least, provide free advertising for the company.

What Are the Different Types of Airdrops?

Airdrops can happen several different ways. The term is most often used to apply to free tokens being deposited to a user’s wallet in exchange for nothing more than registering with an email address. But that’s not the only type of crypto airdrop.

Standard Airdrop

This is the type of airdrop just mentioned, where users receive free tokens just for signing up for a newsletter or something similar.

Bounty Airdrop

Bounty airdrops require users to perform a simple task to receive the airdropped tokens. Most often this involves re-tweeting something about the project, creating an Instagram post and tagging a few friends, or joining a Telegram group.

Exclusive Airdrops

Airdrops of this type are designated exclusively for people who have an established history with a particular project, website, or community. For example, Uniswap gave its loyal users 2500 UNI tokens in September 2020. This equaled about $1,200 at the time, and there were no strings attached.

Hard Fork Airdrop

This one is a little different. When a coin hard forks from its original blockchain, a new coin gets created, and those who held the original coin will receive an equal amount of the new tokens in their wallets. The most well-known example of this would be the Bitcoin Cash (BCH) hard fork that occurred in 2017: Bitcoin users who held BTC received an equal amount of BCH automatically.

Holder Airdrop

These airdrops are similar to hard forks in that users who already hold certain tokens will receive new ones. EOS and Ethereum, for example, have sometimes offered users free tokens when a new project was created on one of their blockchains. These are not hard forks of the original coins, but rather entirely new projects created on top of the EOS or Ethereum protocol.

All these types of airdrops have one thing in common—the distribution of new coins.

How Do I Get Airdrops From Crypto?

The easiest way to find crypto airdrops might be to simply search for “crypto airdrops” or “what is a crypto airdrop.”

Since these events are designed for marketing and project promotion, they tend to make themselves relatively easy to find. There are even some websites exclusively devoted to listing upcoming airdrops, like Coin Airdrops .

However, scams abound in the cryptocurrency world, and users would do well to safeguard their information wherever possible. When searching for airdrops, it’s possible to encounter someone claiming to offer an airdrop when they’re actually just engaging in a phishing attempt (trying to steal information).

If an alleged airdrop were to ask for something like your login credentials to a website or bank account, the private keys to a cryptocurrency wallet, or any other personal details, it might be a scam. Requests to download “special” software or clicking links found in emails could also be phishing attempts designed to expose your device to malware or steal sensitive information.

Is it Even Worth the Effort?

When considering that airdrops provide something for nothing, some people might say they are worth it.

At the same time, when a new project decides to airdrop crypto, this leads to a supply glut that can drive prices to tank later on. Because a lot of users end up receiving coins, a lot of them tend to cash out at the earliest opportunity. It’s not uncommon for airdropped coins to lose most or all of their value over time.

One good example of this involves the Auroracoin (AUR) airdrop. AUR was a cryptocurrency designated for citizens of Iceland in March 2014. All residents of the country were eligible to register for free receipt of 31.8 AUR, which was worth roughly $380 at the time.

At the time of writing, one AUR was worth about $0.10, meaning the 2014 airdrop would be worth little more than $3 in 2021. Auroracoin can only be traded on two smaller crypto exchanges as well, meaning there is very little liquidity in the market and holders might find it difficult to sell.

This demonstrates the degree to which airdropped coins can become almost worthless over time.

Are Crypto Airdrops Safe?

Some users have also fallen victim to fraudulent airdrops in the past. During the ICO craze of 2017 and 2018, there were many fake crypto startups that were actually frauds.

Amid an industry with much more hype than regulation, some savvy scammers devised a way to attract investment funds without actually creating anything. They would create a coin or say they were planning on creating a coin, and then claim to have plans to airdrop crypto.

Sometimes the companies would require small fees to be eligible for the alleged airdrop, or other speculators would make investments believing that the airdrop itself would lead to a successful project.

While these types of scams might be less common today than they were three or four years ago, investors would still do well to be wary when it comes to crypto airdrops.

Looking at the idea of “safe” from another perspective, few would argue that the coins received in an airdrop could be considered a safe investment. Altcoins in general can be highly speculative, and that goes double for any new coin that has been airdropped.

As we saw in the Auroracoin example, airdropped crypto can lose nearly all of its value.

Many people who sign up for or become eligible for airdrops are aware of the situation, and are likely to take profits as soon as possible. The few airdrop recipients who happen to receive a coin of significant value at a time when there is a liquid market for it might make some money. Others may be left holding a bag of worthless coins later on.

The Takeaway

Crypto airdrops involve users receiving something for virtually nothing—an email address, or some social media promotion. But while some recipients have gotten lucky enough to be the first movers in an airdrop that actually had value, many others have also fallen victim to lofty promises of the “next big thing” in crypto.

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