Cryptocurrency Airdrops: The What, the Why, and the How

via Merkle

As the blockchain industry and ecosystem develop, new terms become commonplace amongst those who run in blockchain technology circles. In the cryptocurrency sphere, the word airdrop has taken on a different meaning from the more widespread military definition. In the blockchain world, the term airdrop refers to gifts.

What is an Airdrop?

Airdropping is the process of distributing tokens to a user’s blockchain wallet at no cost to them. It is a technique commonly used by startup businesses that are undertaking an Initial Coin Offering (ICO), as a tool to promote projects and increase their brand exposure.

In addition to this, airdrops can happen when there is a fork in a cryptocurrency. Examples of this include Bitcoin users getting Bitcoin Cash, and Ethereum users getting Ethereum Classic tokens equal to the value of that held in their original wallets.

Why conduct an Airdrop?

Airdrops can happen for a number of reasons, the most common being:

To reward loyalty: Free tokens can be provided as a reward to users of cryptocurrency exchange websites, giving them free tokens to say thanks for being loyal to their platform. That was the case in 2017 when Binance gave 500 TRX to its users.

Marketing: Used by companies to attract attention during their ICOs in order to encourage investment in their crypto tokens. They are also often used at the launch of a new cryptocurrency, particularly when this is the result of a fork (for example, the Bitcoin Cash airdrop mentioned above).

Decentralization: This can help to create a higher level of security for the network and its users. For example, OmiseGO distributed a sizable chunk of its tokens to Ethereum users.

How do Airdrops happen?

One of two methods are generally used to conduct airdrops:

Planned: Planned airdrops are usually announced in advance, as part of a marketing strategy to promote a project and generate excitement in the crypto-community.

Surprise: Surprise can also generate excitement and a lot of free publicity when it is a well-established cryptocurrency that conducts the airdrop.

Where to find Airdrop information

Information relating to airdrops can be found in a number of sources, including:

  • Social media accounts/profiles
  • Crypto/blockchain forums
  • Crypto/blockchain news sites/applications

These sources can help users select the most popular or current airdrops. Besides this one, two other websites to source interesting and reliable information about airdrops are Airdropalert and Airdropaddict.

Information about airdrops can also be sourced directly from the horse’s mouth, with companies that plan airdrops announcing them through social media and press releases. These releases generally contain the requirements on how to be eligible for the drop. An example of this can be seen in LCCX.

Security and scams

Like any other new technology, crypto and blockchain technology has attracted plenty of scammers in the recent past, and airdrops have not escaped this. It is, therefore, necessary to verify information about an airdrop, especially if you heard about it in an advertisement. You should never be asked for a private key, for your personal data, or for you to transfer funds.


Airdrops can be a useful technique to raise awareness of a new token or project – or to gain some coverage in the press with the excitement of free tokens for an established cryptocurrency. They have benefited the market greatly in building desire in users to invest in new projects, and to remain loyal to existing ones. But, like all technologies, it is vital to be on guard against scams and scammers, who will try to cheat you of your hard-earned cash and crypto.


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