An airdrop is a distribution of cryptocurrency, tokens, or NFTs that are sent to a web3 wallet address for free as a promotion, or as added value for participating in an experience or purchasing a digital asset. Airdrops are generally used to add additional value or to draw attention to a brand or experience.
Airdrops are mostly a promotional strategy that is used to draw attention to an NFT project or other blockchain-based community such as a DAO, or a newly created cryptocurrency.
What Is an NFT Airdrop and How Does It Work?
This is why developers have come up with a remarkable method called "airdropping" to promote their projects upon their launch in response to the intense competition in the marketplace. New projects use this strategy to promote themselves before the official launching date.
In this article, we're looking at an NFT airdrop. An NFT airdrop is a dispersal of NFTs or digital assets that are sent to a web3 wallet address for free as a promotion or as added value for participating in an experience or buying another digital asset.
The brand randomly sends such gifts to its’ holders as a token of appreciation. It also serves its purpose of advertising.
NFT Airdrops are mostly implemented as a promotional strategy that is used to draw attention to an NFT project, or associated event. However, NFT airdrops are also a way that NFT projects can continue to add value to their holders by basically gifting them a free product, The first-ever crypto airdrop is the Auroracoin cryptocurrency developed by Iceland.
It was created to be the national digital currency. All those who signed up received the crypto airdrop of 31.80 Auroracoins (AUR) for free. The price of AUR descended after the airdrop, and the project was abandoned.
Crypto or NFT airdrop is one way to get your hands on free tokens, This is why in the cryptocurrency or NFT communities on Twitter, Reddit, or Discord, you may see people excitedly showing off "airdropped" tokens or digital images from their wallets.
Types of NFT Airdrops
There are different types of NFT airdrops, but the first three are the main types.
It is also known as “general admissions” airdrops. When you complete a simple promotional task, like sharing a social media post, joining a whitelist, or signing up for a newsletter or other email service, you will receive a fixed amount of tokens.
This is known as a “standard airdrop.” To receive an airdrop, you don’t have to spend anything; you simply perform a task and get rewarded with an airdrop.
It can be likened to a coupon in the real world. You might get free appetizers the first week if a new restaurant in town starts up in your neighbourhood, the restaurant is attracting additional business by offering them a free appetizer as an added incentive to visit. Both parties gain from this arrangement.
Otherwise known as “VIP” airdrop, Faithful members of an NFT or Web3-related community receive free tokens as part of an airdrop. To be qualified for an exclusive token airdrop, you must be a long-time user of the blockchain project or have shown your loyalty by remaining a subscriber.
As a grocery store member, receiving exclusive airdrops is like a loyalty program for the store. You obtain a loyalty point for your daily patronage in that specific store.
One example of an exclusive airdrop is the $LOOKS airdrop. If you had traded 3 ETH or more on Opensea between a specific timeframe, you were eligible to receive free tokens that were airdropped straight to your wallet.
All you have to do to receive your tokens was list your NFT on the LooksRare marketplace.
Then, you could trade your $LOOKS tokens for ETH, or any other crypto. As you can see from this example, the incentive was to receive free crypto, and all users had to do were list one item for sale on their marketplace.
Community (NFT) Airdrop
Several factors can lead to the initiation of an NFT airdrop. Either by keeping one particular NFT in your wallet, being part of a giveaway, or even receiving it as part of a marketing endeavor.
NFT airdrops can be very expensive and extremely profitable for anyone who gets them. The Bored Ape Mutant Serum is an incredible example of a valuable NFT airdrop. The Mutant Serum NFT was airdropped to holders of the Bored Ape Yacht Club NFTs.
Although these Mutant Serums were delivered for free to holders, they quickly went on secondary NFT marketplaces for ridiculous prices, over 3 ETH, which equals thousands of dollars. This means not every NFT airdrop is profitable. Some of them may be worthless, while others may be scams. Unknown NFTs can come into your wallet at any time, so you should be very careful while dealing with them.
Others are Bounty airdrops: Alike to standard airdrops, participants are needed to do more promotion work, usually on Facebook or Twitter, to spread the word about the project, Holder Airdrops: Participants must have an existing cryptocurrency like ETH or BTC to receive an airdrop, Hardfork airdrop occurs when there is a permanent split or new version of a blockchain that is released, hence creating the need for a new token to go with it.
How Do Airdrops Work?
Different startups have other ways to launch airdrops, but there are a few standard practices. Firstly, users interested in obtaining a specific token or NFT have to own a wallet to store the airdropped item.
Projects that haven't been launched yet, often ask their supporters to follow their social media channels to help them create awareness of their brand.
Developers who launch an airdrop will announce the time, date, and other relevant details of the airdrop on their official website, their Medium page, or any other social media platform such as Twitter or Telegram.
Users are normally required to join, follow, and share the project's social media channels, along with engaging with community groups on platforms like Discord and Telegram.
Airdrops typically have a registration window with limited spots for participants to sign up and join before a specific deadline. However, airdrops can occur more than once depending on reception, so missing out the first time around isn't always terminal.
Their value varies too but is usually around a few dollars. Partaking in an airdrop is very easy and can turn out quite profitable in the long run.
How to get an airdrop
To receive an airdrop, you have to hold a minimum quantity of a certain asset such as an NFT or have used a certain service that qualifies you to receive an airdrop such as transacting on a marketplace.
Furthermore, you will need a web3 wallet to receive your airdropped asset. Although, airdrops can be received for completing a simple task for someone or a brand.
Such tasks could be something as simple as sharing a social media post, creating a piece of content, or assisting in spreading awareness.
Generally, if an NFT brand is requesting that the community earns their airdrop, it's as simple as sharing social media posts, bringing more people into the community, or creating content around the brand.
NFT airdrops are just like giveaways. You have to be eligible and the company picks random individuals to receive the airdrop. An old method of building a customer base.
Overall, NFT airdrops are safe and can be an excellent way to earn additional income, utility, and assets without having to do much in return. However, if you receive an NFT airdrop randomly, mainly if it’s from a brand you aren’t involved with, you shouldn't interact with that NFT.