What is a NFT Airdrop?
With an increasing number of different coins and NFT projects it has become more and more difficult to stand out from the crowd. One way to gain greater exposure are through so-called “NFT Airdrops“.
Airdrops are blockchain-based coins or tokens that are distributed free of charge by the issuers to holders of the respective cryptocurrency. The only exception to this are hard forks, where airdrops result from the technical nature of the blockchain.
Reasons for NFT airdrops: This is why cryptocurrencies come for free
The reasons for airdrops can be many. The most common of them are:
- Marketing & advertising (standard airdrop)
- Data collection (Bounty Airdrop)
- Even distribution to prevent centralization
- Incentive system for early investors (Holder Airdrop)
- Hard forks (Hardfork Airdrop)
- Market manipulation
Airdrops for marketing & advertising
Even in the world of cryptocurrencies, the companies or groups behind them are wondering how they can reach a larger crowd quickly. Since free giveaways are always well received by the market, this strategy is used to try and create hype around their own coin.
Sometimes a certain amount of Coins is distributed without condition, sometimes there are certain conditions which have to be fulfilled on the part of the interested parties. Examples are:
- “Join our Telegram group and get 100 Coins for free.”
- “On June 15, existing Coin X owners will be randomly distributed a total of 25,000 Coins.”
- “Sign up for our newsletter and receive 30 Coins to your wallet in return.”
Data collection
NFT Airdrops are quite a good way to get data from many users. Thus, there is more often the condition “data against coins”. The data that is collected is usually name, email address or phone number, which can then be used for advertising purposes.
Even distribution to prevent centralization
One reason for airdrops away from PR and marketing is simply to prevent the threat of centralization. It can happen, especially with small coins, that initially only a very limited group of investors is interested in the cryptocurrency.
This, in turn, can lead to the existence of a large investor who subsequently has the price more or less in his hands as a result. To prevent this centralization in the market, airdrops can be used to distribute them to people who would never have bought the coin but are happy to take it for free.
Incentive system for early investors
To get investors excited as early as possible, it can make sense to offer an incentive through an airdrop. This can look like this:
- Those who participate in an ICO by a certain date receive 5,000 additional tokens as a gift
- The first 3,000 investors participate in an exclusive airdrop and thus receive free coins
The shortage creates an incentive to invest in a cryptocurrency as early as possible or even at all.
Hard Forks
When there is a hard fork of a particular cryptocurrency, the blockchain splits into two camps at a certain point and a technically improved version of a particular coin is usually created. However, the old blockchain and also the old coin still exist in parallel.
If you hold the original coin before the hard fork, you always get the new coin for free as well. The prerequisite, however, is that you own the private key and the cryptocurrencies are not located on a crypto exchange, for example.
Market manipulation
Airdrops can be used on the part of the issuers for the so-called “pump & dump”. This is an attempt to get as many traders as possible into the market. As a result, the price of the cryptocurrency rises rapidly. After a certain increase in the price is sold..However, this is market manipulation and therefore a form of fraud.
How do NFT airdrops actually work?
NFT Airdrops can be used on the part of the issuers for the so-called “pump & dump”. This is an attempt to get as many traders as possible into the market. As a result, the price of the cryptocurrency rises rapidly. After a certain increase in the price is sold..However, this is market manipulation and therefore a form of fraud.
Internet
Step 1: Find out about current airdrops on the Internet either on specialized websites, forums or Telegram groups.
Wallet
Step 2: Create a wallet where you will receive the free coins or tokens. The wallet should be ERC20-compatible, which is almost all wallets on the market.
Form
Step 3: Fulfill the condition that entitles you to participate in the airdrop. This can be sharing the airdrop on social networks, leaving your email address or owning a certain amount of coins.
Airdrop
Step 4: You will need to provide your wallet address (public key) to receive your coins via airdrop.
Wallet
Step 5: After receiving the coins, you can now hold them (“hodlen”) or sell them on a crypto exchange. Keep in mind, however, that these are usually very small and unknown coins and can therefore only be traded on very few exchanges. Due to the low trading volume, it can also be difficult to get rid of the coins at all if they do not become more popular after the airdrop.
How do I find out about new NFT airdrops?
Since there are new airdrops almost every day, various alert services have been established, which list new airdrops on the website and provide an overview.
Another possibility are communities and Telegram groups. In this case, however, we cannot make a specific recommendation, as the true operators and their interests often cannot be determined. Conclusion on airdrops: difficult to understand and (mostly) not worth the effort.
At first glance, airdrops sound like a good way to earn money. At second glance, however, disillusionment quickly follows (except for airdrops through hard forks). Due to the huge amount of various blockchain projects, it is hard to see through which project is serious and which one is a scam.
One thing must also be clear: a truly reputable project usually does not need airdrops. If the coin or token has a real benefit, people will find out about it and the development team will not have to resort to shady marketing methods.
