Guide to NFT Airdrops

What is NFT air drop

What is an Airdrop?

A crypto airdrop is a marketing tactic that developers use to promote their blockchain projects by distributing users a token or an NFT for free. It generates additional value or draws attention to an NFT project or DAO.

Startups use the airdrop strategy for people who invest in NFT or cryptocurrency. Its primary use is to generate community awareness and raise awareness among certain crypto or NFT project. If the publicity sores for the particular token, it will help boost the price of that token among its Initial Coin Offering (ICO) or during the first listing of the cryptocurrency exchange.

The first airdrop to ever exist was the Auroracoin cryptocurrency in March 2014. It was distributed free for Iceland residents. Through this airdrop, people who signed up for it received 31.80 Auroracoins (AUR), equivalent to $12 per AUR.

Why Do Airdrops Exist?

The primary reason for crypto or NFT airdrop is to promote a blockchain project, service, or startup. The community that signs up for an airdrop receives free tokens. By issuing this token to the community’s people, the developers can launch their project and ensure fair distribution among the community.Additionally, the receiver of these tokens also gets incentives to spread awareness further and help the project reach a wider audience. This is necessary to gather more interest in the token, likely increasing its price.

How Do Airdrops Work?

The launch of an airdrop differs from startup to startup. Even though different startups follow different practices, there are a few conventional ways. The first step for receiving an airdrop requires you to have your own wallet for the crypto or the NFT to be airdropped. Then users are required to follow and share the project’s social media channels.Engaging in the community platforms like Discord or Telegram of that project is also required. There are registration windows with limited spots available where participants must sign up before the deadline.

Where Can You Receive Airdrops?

Typically, the relevant details of airdrops launches are announced on the developer’s website or social media platforms like Twitter or Telegram, where they have a good presence. Additionally, suppose you are a digital currency enthusiast. In that case, you can even visit third-party airdrop tracking sites such as AirDropAlert to get the latest news on the recent and popular airdrop launches you would like to receive tokens from.

What Are the Types of Airdrops?

There are various types of airdrops. Let’s take a look at the most common ones seen on the web3 space:

1. Standard Airdrop

A standard airdrop is considered general admissions in the airdrop lingo. To receive it, you have to complete the assigned tasks. The task might include sharing a social media post, signing up for their email newsletter, joining a whitelist, or such.For receiving standard airdrops, you do not require to spend anything. You have to complete a task, and in return for the completion, you will be rewarded with the airdrop.

2. Exclusive Airdrop

Exclusive airdrops are given to loyal users of a blockchain-based community or a cryptocurrency. It can be considered a reward for being a loyal user and is generally given without other expectations.Consider exclusive airdrops as a loyalty reward you receive either on credit cards or in shopping stores. You get additional offers and value when you are a loyal customer. Similarly, exclusive airdrops also provide additional value to its holder.

3. NFT Airdrop

An NFT airdrop is held for several reasons. You may receive it as a marketing strategy to promote a new project, maybe because you hold a certain NFT in your wallet, or you may receive it as a gift for winning a giveaway.Some NFTs are extremely valuable. For example, the users of Bored Ape Yacht Club NFTs were airdropped the variations of what is known as the Bored Ape Mutant Serum for free. The users sold it in the beginning for over 3 ETH on various NFT marketplaces, and later on January 2, 2022, the Mega Mutant Serum was sold for 1,542.069 ETH.However, you need to remember that some NFTs are valuable; some may be worthless or total scams. If you find an unknown NFT from an unknown source in your wallet, be cautious and try not to sell or trade it.

4. Hardfork Airdrop

A hardfork airdrop is a change to a network’s protocol that creates the need to have a new token for it. The old version of the blockchain will still exist along with your old tokens. The new tokens that will be airdropped to you will contain an equal amount of tokens to what you currently hold.

What Are the Advantages of Airdrop?

This successful marketing strategy can guarantee a great widespread across for your new NFT project, creating a win-win situation for both the developer and the recipient.

What Are the Disadvantages of Airdrop?

They are an excellent promotional strategy; however, they have their own fair share of disadvantages with considerable risks. Some scammers take advantage of airdrops by making them a pump-and-dump scheme. This makes airdrop recipients vulnerable to marketing scams and phishing attacks if it is sold by unauthorized third-party.A general rule that a recipient needs to follow is that a genuine airdrop will never ask for your sensitive information like private keys or seed phrases.Moreover, an airdrop is also risky for developers. If recipients of a new airdrop suddenly decide that it is not worth the hype, they will sell it. This will cause the token value to clash and jeopardize the business.Airdrops are an excellent promotional asset that also provides additional value to your loyal users. It is a great way to earn additional income without giving much in return. But be aware of scammers!

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