Guide to Crypto Airdrops: Get Free Crypto Tokens

By Ben Knight May 10, 2024

What is an airdrop?

Crypto airdrops are a marketing tool used by a new blockchain project to build momentum and engagement. They typically involve sending a small (or proportionate) amount of a new token to wallet addresses that meet certain criteria. A crypto airdrop is a way for active members of the community to be rewarded for their participation within the network.

Why would a project give away free tokens?

An apt comparison would be asking why a company would give money to a sports team when sponsoring them. The answer is fairly simple – brand recognition and engagement. 

An airdrop is a way to get people in the crypto community excited. It can build hype on social media, drawing investors to the network that may never have known the project existed. This can become even more effective when the criteria for receiving airdropped tokens involves sharing something on a social media platform. So even if the project theoretically “loses” money on the airdrop, they recoup it in blockchain activity.

Additionally, most airdrops reward users who participate on the network. Those who spend more money on ecosystem applications, posting on forums and chatting in the discord will often receive more from an airdrop than someone who meets the minimum requirements. Therefore, the airdrop encourages real involvement – the key to a project’s long-term survival.

Advertisement

Types of crypto airdrops

There are several different types of crypto airdrops, with some more popular than others. The main difference is how people participate and become eligible to receive tokens.

Standard airdrop

A standard airdrop is straightforward. In most instances, users only need to register their interest in the event and add a supported wallet address to receive their tokens. Occasionally, the demand from participants will outpace the airdrop’s token supply, so the project developers will implement a “raffle” system to determine who “wins” the airdrop. 

Standard airdrop example: 

Standard airdrops tend to reward lower amounts of the token than other types. For example, decentralised exchange PancakeSwap regularly airdrops hundreds of CAKE tokens via competitions to new and existing platform users.

Bounty airdrop

Bounty airdrops require its participants to complete a set of tasks before they can become eligible to receive their tokens. This is a popular method as it helps the project become better known across the crypto community. These tasks can be as simple as creating posts on a forum, sharing a tweet and so on. 

Bounty airdrop example: 

The controversial identity verification blockchain, Worldcoin, rewards new users by airdropping them WLD tokens.

Holder airdrops

Holder airdrops more commonly occur when established crypto projects bring out a new token. These airdrops automatically add new tokens to wallet addresses that hold a specific amount of a specific coin. Occasionally, the new token completely replaces an old one due to redundancies or new upgrades.

Holder airdrop example: 

Some of the most well-known forks (like Bitcoin Cash and Bitcoin Gold) employed this system to reward holders and stimulate the ecosystem. A newer example was the ApeCoin airdrop, which allowed pre-existing APE holders to access additional tokens. 

Exclusive airdrops 

Exclusive airdrops are less common but can be more lucrative. These airdrops aren’t open to the general public and occur when the developers hand-pick those they believe “deserve” first access to the free tokens. This might stem from high community engagement, participating in bug bounties, or spending large sums of money on ecosystem applications. 

Exclusive airdrop example:

dYdX was one of the most successful airdrops of all time, rewarding those who had traded on the platform with over USD $1B worth of tokens.

How crypto airdrops work

Crypto airdrops all tend to follow the same timeline. A project may plan to airdrop a new token for several reasons – trying to increase its presence, having a fork in development, or simply being fresh to the scene. Either way, the project will begin by announcing the airdrop through all major resources, such as social media, their website, or even directly messaging active forum participants.

Those who are interested will register their intent for the airdrop – usually found on the project’s website – and provide the information required to participate. Typically, you only need to disclose your wallet address and proof of eligibility for bounty airdrops. 

Finally, the developers will verify each participant to ensure they meet the airdrop’s requirements. Then, depending on the release schedule, tokens will automatically be distributed to those eligible. For the most part, the new coins can immediately be spent within their native ecosystem. On occasion, developers will put time-based restrictions on trading the airdropped tokens to avoid price crashes.

Where do I find crypto airdrops?

Many online platforms can help investors find upcoming airdrops. Some big crypto exchanges, such as Binance, will actually host airdrops themselves, meaning users can easily see a list of future token distributions and sign up for those they’re interested in. Analytic sites such as Coinmarketcap, dAppRadar and CoinGecko can also help users find airdrops for both new and established projects. Discord servers and crypto forums are also great communities for finding new airdrops, as dedicated people share new and exciting opportunities they may find. 

The issue with these tools is that they often only provide a basic list of airdrops, leaving all the research to you. For airdrops with complicated eligibility requirements, this can be a little intimidating. That’s why an in-depth website like Empire Crypto Trading can be quite valuable for finding crypto airdrops. The team provides a condensed, step-by-step guide on how to participate in popular upcoming airdrops, while also explaining what the blockchain project does and the value it provides to the industry.

What are the most successful airdrops?

To be honest, lots of modern airdrops distribute tokens from function-less, meme-based projects that quickly become worthless. However, every now and then, legitimately disruptive crypto projects offer an airdrop that can change the course of blockchain history.

Arbitrum is a scaling solution for Ethereum that operates on top of Ether’s network. The project airdropped 4 billion worth of ARB in September 2021 to those who had participated a certain amount on the Arbitrum L2 chain. At the time, ARB was trading at USD $1.38, which means over $1.5B worth of tokens had been airdropped in a single day.

Another successful airdrop occurred in 2021 – this time in May. A Binance Smart Chain project, Gas, distributed 1,000 GAS to early network adopters, valued at around USD $50. Today, 1,000 GAS is worth approximately $6,000, making it fairly lucrative for participants.

UniSwap, one of Ethereum’s most powerful decentralised exchanges, had a great airdrop of its own. The DEX was already fairly well-known at the time of releasing its native token, UNI, to the world. Those who had used UniSwap prior to the airdrop (September 2020), would receive 400 UNI – valued at an impressive USD $1,200 at the time. This made it one of the most valuable airdrops of all time.

Risks of airdrops

Legitimate airdrops provide investors with access to free tokens for exciting up-and-comers. However, unfortunately, the airdrop space is also rife with scams as the prospect of “free money” can lead people to fall for tricks they’d otherwise ignore. 

Always remember that a legitimate airdrop will not require participants to pay money directly to a company. This is a common type of airdrop scam, where the new “project” will require a sum of money for participants to be eligible. Many times, the airdrop simply won’t go ahead, or the distributed token will be valueless or untradeable. 

Another similar scam to watch out for specifically occurs with a “holding” type of airdrop. In this instance, the airdrop requires participants to purchase a specific digital asset – a crypto or sometimes even an NFT. However, as demand increases and the price of that token pumps, the project owners sell their holdings, manipulating the market to improve their profits.

The final, and potentially most dangerous airdrop scam, is a “phishing” scam. Here, a seemingly legitimate project will connect to your wallet (e.g., MetaMask) and scrape your password when you enter it. There are a few ways to avoid this:

  • Never connect your wallet or enter your password on a website you don’t trust.
  • Always research the project behind the airdrop before, and specifically, the developers. Do they have past legitimate projects?
  • Consider making a “burner” wallet with low amounts of capital and a throwaway password to use specifically for airdrops.
  • Double-check every link you click on, as some scams may include a typo or different suffix (for example, .net instead of .com) to trick users into thinking it’s a legitimate platform.

Ben Knight
Author

Ben Knight

Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.