Paul McAviney
Paulie's Blog

Paulie's Blog

What The Heck Is An Airdrop?

What The Heck Is An Airdrop?

What They Are, What They're For, How To Get One.

Paul McAviney's photo
Paul McAviney
·Jan 3, 2022·

7 min read

Table of contents

  • Introduction
  • So What The Heck Is An Airdrop Anyway?
  • What Are Airdrops Used For?
  • How Do You Qualify For An Airdrop?
  • Tread Carefully
  • Good Luck!

Introduction

There’s no doubt, 2021 was an excellent year for Web3 users. If you were browsing crypto Twitter over the holidays, you may have noticed a lot of people talking about an SOS airdrop. Maybe you were one of the lucky ones to actually qualify for it? If you are curious about what all the fuss is about, this article is for you! We will go over what exactly an airdrop is, what they are used for, and how you might be able to qualify for one yourself. So strap on your parachutes, let’s jump into it!

So What The Heck Is An Airdrop Anyway?

Web3 is full of innovative new technology and people are getting rewarded for being early adopters. Since most of these applications require you to connect your crypto wallet in order to interact with them, it is easy to find out who the users are and compensate them for embracing the tech before anyone else. This reward, usually unannounced, is called an airdrop. It refers to the old WW2 term where food and supplies were dropped by plane to soldiers on the battlefield or dropping supplies in the same manner to victims of a natural disaster.

If you suddenly notice an additional amount of tokens or a fancy new NFT in your crypto wallet and have no idea where they came from, you may have just received an airdrop. Unsolicited airdrops aren’t the only way to receive them, though.

The most common way airdrops are received is through a claiming process. A project might make an announcement that some of its users qualify for a reward based on certain criteria. In the case of the SOS token, people were rewarded as a result of how much they spent on the OpensSea NFT Marketplace. The recipients were then able to go to https://www.theopendao.com/ and initiate a claim. Some people reported being able to claim up to $500 000 literally for just using the platform.

I’m going to give $30,000 to someone who retweets this tweet because it’s the end of the year and $SOS gave me half a million dollar 🆘️! (must be following me so I can dm you if you win). ofc Will show proof! pic.twitter.com/TJDc5YrU87

— Perry Saylor (@PerrySaylor_000) December 26, 2021

The crazy part? It wasn’t even OpenSea that initiated the airdrop. The unrelated organization OpenDAO took it upon themselves to reward NFT enthusiasts, most likely as a marketing scheme.

Handout(resized).jpg

Airdrops can also be self-initiated. A platform might clearly state that it is handing out a reward for completing certain tasks, such as signing up for a newsletter or finishing a coding tutorial. Upon completing the task, the user is compensated for their efforts.

One other notable method of collecting an airdrop is through the hardfork of a network, such as when Ethereum split into Ethereum Classic or when Bitcoin split into Bitcoin Cash. To explain a blockchain hardfork simply, it is when one network splits into two different networks. This can happen for various reasons which I won’t get into. All you need to understand is that when it does happen, holders of the token used on the original network receive the same amount of the new token that is used on the forked network.

Airdrops aren’t just for tokens though. It is very common for NFT projects to gift another NFT to the original holders. Bored Ape Yacht Club sent holders a serum NFT which, when combined with their Bored Ape, created an entirely new NFT called a Mutant Ape!

Ape_complete(resized).jpg

What Are Airdrops Used For?

One of the main reasons organizations are giving out airdrops to its users is simply to reward them for being the first to interact with their platforms. These early adopters are providing quality user data and feedback in the initial stages of release, as well as potentially spreading the word. What better way to reward these individuals than free stuff!? When people receive free gifts, they usually tend to talk about it, which leads to the second reason an organization might send out an airdrop..

It’s a really great marketing tactic. Almost every time an airdrop has been released it has generated a ton of buzz around it. This in turn brings about a lot of brand awareness, which usually leads to more people getting involved.

graph(resized).jpg

Since big platforms such as Google and Facebook have put limits to the types of crypto advertising they allow, these organizations have to find other ways to get the word out about their projects. When something goes viral, everyone wants in on a piece of the action.

Additionally, for newer projects, if they announce they will be doing an airdrop in the future, or even just hint at it, people will be lining up to try out their platform. Considering some people have received airdrops worth thousands of dollars just for being early adopters, the risk to reward ratio is very enticing.

How Do You Qualify For An Airdrop?

wen_token.png

Although there usually aren’t many absolute guarantees that an airdrop is on the way, there are a few signs you can look for:

  • If they announce it: This is obviously the easiest sign to spot. Following Web3 companies on Twitter or subscribing to their newsletters is a surefire way to get notified of an upcoming drop and what you might need to do to qualify.
  • If an organization is decentralizing: One of the most common ways for decentralized autonomous organizations (DAOs) to facilitate governance is through the use of an ERC-20 token. Who better to do the governing than people actively involved in the project? Start contributing and you could get airdropped some governance tokens. You might also find you enjoy the community, make some friends, and build cool projects along the way!
  • Prior airdrops: Based off previous airdrops, it’s a safe bet that users of new protocols and projects could be rewarded for their efforts. Try to go through the actions a platform might want you to take for your highest chance of qualifying. For example: Using the swap feature in your MetaMask Wallet or trading and minting NFTs with zkSync. A lot of people on crypto Twitter are speculating that new Ethereum Layer 2 protocols will be hotspots for incoming airdrops in 2022. This Bankless article lists a few potential avenues you could investigate.

Tread Carefully

With all the hype around airdrops and basically anything else related to cryptocurrency, there are tons of scams out there. Some of them can be quite sophisticated too. If you’re playing around with platforms and trying to get qualified for an airdrop, do some research before aping into it. Brand new projects are popping up every day and some of them undoubtedly have nefarious intentions.

thief.jpg

When first looking at a project, try to find information about the founders. If they are staying anonymous and have no previous reputable work in the public domain, that’s a big red flag. How long has the project been around? What are people saying about it? If the founders are well-established with prior work under their belts, chances are pretty high it’s legit.

Also be very careful when interacting with applications that require the use of your crypto wallet. Know what transactions you are signing and NEVER give anyone your private keys. If you have to enter your private keys to receive an airdrop, it is definitely a scam. If you are still questioning the legitimacy of the airdrop, move anything of value out of your wallet before initiating the claim.

The whole point of an airdrop is to receive something for free. If you are being asked to pay a registration fee or give someone money to be qualified, they are trying to play you. The only fee you might have to pay when claiming an airdrop is the gas fees.

If a large number of folks are receiving an airdrop, try to read into how their experiences are when claiming. Don’t just blindly follow the hype hoping to make a quick buck. Twitter is an excellent source of not only finding out about airdrops, but for reading about how people are reacting to them as well.

Good Luck!

odds(resized).jpg

I hope this article has helped shed some light on airdrops for you. Get involved with Web3 and the potential for rewards can be great. Of course, none of what I’ve posted here should be considered financial advice. Do your own research and be safe out there.

Good luck frens! WAGMI <3

 
Share this