As people are getting to know more about cryptocurrency and digital money, there is an increased number of investors in the crypto ecosystem. However, some people are still hesitant to join the crypto community considering their level of loss affordability. Understanding this concern, the crypto projects offered the opportunity to earn extra income without any investment or loss.
The airdrops and giveaways are introduced as an opportunity for people to join the crypto community without any investment or loss. These airdrop events and giveaways aim to enlarge their community by distributing free assets. This article gives an overview of the airdrop and giveaway in the crypto ecosystem and the risks associated.
What Is An Airdrop?
The airdrops can be said to be a promotional tactic that is usually done by the new cryptocurrency issuers to deliver a certain amount from the new asset directly to the participating users’ crypto wallet. It is a way to earn free coins without investing a single penny, and it is also a smart strategy for new ventures to attract a wide number of investors and expand their community.
This performs as a public awareness campaign for publicity as well as an incentive for the participants, which can be compared to the concept of handing out free samples before the actual purchase to potential investors, who are more likely to buy the product.
The airdrops are undertaken by blockchain-based companies to level up the visibility of the new project in the market. However, the initial goal of every novel project is to be listed on exchanges as an initial coin offering (ICO), to achieve this goal, first they have to make the users aware of the arrival of the new coin.
Suppose the users either sell the coins during the ICO or even hold them. In that case, they will help the publisher gain wider publicity and attention from a significant number of crypto wallet holders.
How Does The Crypto Airdrop Work?
To participate in a crypto airdrop, the users are required to participate in specific activities or even tasks to acquire coins. These activities include actions such as referring to friends, joining telegram groups, engaging on social media, or being a platform user. These activities of users help the project acquire a wide range of attention and awareness on the upcoming launch through advertising, referring, and enrolling in a particular project, and as a reward in return, they receive free tokens.
The distribution of the eared tokens is done using smart contracts once the list of the participants is compiled. The users are required to hold a crypto wallet that supports the project’s designated blockchain network. Once all the requirements are fulfilled, the user can claim the assets that will be automatically distributed to their wallets.
Types Of Crypto Airdrops
- Standard Airdrop
- Bounty Airdrop
- Holder Airdrop
- Exclusive Airdrop
- Standard Airdrop
The standard airdrop doesn’t ask its user to participate in any tasks, creating an account is enough to participate. The standard airdrop is usually time-sensitive, or a limited supply of tokens is distributed. This usually follows a first come, first served method, but claiming tokens from standard airdrop isn’t easy as there is a chance for some malpractice, such as malicious users who create multiple accounts that could fill up the reservations.
- Bounty Airdrop
The bounty airdrop requires the users to complete certain tasks that usually revolve around those that highlight and advertise the project’s awareness.
- Holder Airdrop
The holder airdrop, as the name suggests, rewards loyal users for their long-term commitment. The users who are holding a designated amount of coins at the promotion time are rewarded.
- Exclusive Airdrop
The exclusive airdrop rewards the users who have worked on the project’s publicity or the platform for a long period. It is especially for the individuals who are active community members and engage in the project’s social media channels.
Risks Associated With Airdrops
As the demand and popularity graph of airdrops is going all the way up, the risk elements are as high as the awareness. The opportunities for hackers to make use of the major platforms to mislead the users into joining fake airdrop events and send them fake tokens. Using these fake tokens, the hackers lead the users to the imitating webpages of famous project’s domain names and interfaces. These will ask you to connect your wallet or even invest some amount in order to receive rewards.
Possibilities for these fraudulent activities are the red flags of airdrops. The airdrops never ask their participants for any payments; to avoid encountering these scams, either bookmark trusted websites or manually enter the URLs.
What Are Crypto Giveaways?
If the airdrops are aiming to gain publicity by assigning their participants certain tasks to claim the tokens, the giveaways do not demand any preconditions. The airdrop and giveaways are both involved in the distribution of free tokens as a part of the project’s awareness campaign.
In the giveaways, the winner is chosen randomly through lucky draws and ruffles; there are no conditions, such as participating in certain tasks or referring others. The outcome completely relies on the luck of the recipients. The crypto giveaways are mainly hosted by popular individuals or influencers. Unlike the airdrops, the giveaways distribute their coins in a very short time after the announcement.
The Crypto Giveaway Scams
The number of fraudulence isn’t small when it comes to the crypto giveaway; it is the participants’ responsibility to navigate to the genuine giveaways. Ensure you are away from scams and phishing attempts. The scammers can pretend to be genuine projects and ask for your private key in exchange for the free tokens.
They might aim to interact with your smart contracts and steal confidential information. These scammers send fake tokens to your wallet. While planning to participate in any giveaways, go for the ones with genuine verification, but some accounts exist on the X platform with verified check marks. There the bots commented on their tweets on how they participated in this giveaway and acquired free tokens.
How The Crypto Airdrop Is Different From The Crypto Giveaway?
Both the airdrop and the giveaway are conducted as part of the promotional purpose. It is important to know the difference between them to make your next investment smart and effective.
The giveaways in general don’t need any specific tasks or preconditions to fulfill; the winner from the recipient is chosen through the lucky draw or ruffles, which completely depends upon the luck of each recipient.
Compared to giveaways, airdrops have longer durations for the distribution of tokens since they serve as part of a broader marketing strategy. But when it comes to giveaways, the winner announcement generally occurs in a very short period.
While the airdrops are announced by organizations, giveaways are hosted by individuals who are influencers and other private organizations. The airdrops have a specific amount of tokens to be distributed among the event participants, but the giveaways do not follow any specific conditions; instead, they randomly distribute the amount.
The Bottom Line
Both the crypto airdrops and giveaways are involved in the distribution of free crypto tokens. The terms and their principles are a bit confusing. But it is essential to recognize them to get a better result while seeking your next crypto reward.
Crypto airdrops and giveaways offer you an exciting opportunity to earn free, potentially profitable tokens. Even though you are familiar with the crypto ecosystem, you should always be cautious about the scams and threats that follow.
Invest a certain amount of time to do meticulous research to verify the legitimacy of each project and its events. Don’t hesitate to think twice before making such risky investment decisions. Lose what you can afford.
