Crypto Airdrop vs. ICO: What’s the Difference?

Crypto airdrops and ICOs are different concepts, even though they both involve launching new cryptocurrency projects. Airdrops don't require any investment from participants, but an ICO is a crowdfunding method.

In an ICO, the project team conducts a token sale to raise funds from investors. ICOs became popular in 2014 when Ethereum conducted a crowdfunding event to support its development. In 2017, the crypto space experienced an ICO boom, with hundreds of new projects adopting the method.

Why Do Crypto Projects Perform Airdrops?

Cryptocurrency projects often use airdrops as part of their token launch strategy in an effort to raise awareness within the crypto community and encourage recipients to use their tokens. Airdrops can also be used to distribute tokens to potential users or investors fairly by ensuring that the initial supply is spread across a large number of people, rather than concentrated in the hands of a few early investors. This distribution model can contribute to a more balanced and decentralized ecosystem.

Airdrops are also initiated as part of a project’s marketing strategy to create buzz and draw attention to the project. Recipients may become curious about the project and explore it further, or discuss the project on social media. This increased exposure can lead to a bigger pool of users, investors, and potential partnerships.

Airdrop can also improve user adoption because the free tokens encourage individuals to experience the benefits of their cryptocurrency firsthand. This can incentivize users to engage with the project and provide valuable feedback. This can help to improve the platform over time.