Innovation is key in the world of cryptocurrency, and an innovative trend that has swept the crypto community off its feet is called Airdrops. Blockchain projects now use airdrops as one method to give away tokens and reward their community for active participation. In this article, we will discuss the fundamentals of Airdrops including what they are, some historic airdrops, and why projects decide to implement airdrops.

What is an Airdrop?

In crypto, an Airdrop is a free distribution of tokens to selected wallet addresses. This allocation is most often conducted by a blockchain project to raise awareness, reward early adopters, or nurture community involvement. Airdrops are a win-win since participants receive tokens for free and projects benefit from increased awareness that contributes to a growing dedicated user base.

Popular Past Airdrops

Auroracoin Airdrop: In 2014, Iceland had the world’s first cryptocurrency airdrop when every citizen aged above 18 years received Auroracoin (AUR). Using the Icelandic national ID database, this bold step was intended to position AUR as a national digital currency and resulted in each citizen obtaining 31.8 AUR in their wallets digitally. This unparalleled act which was about $385 at that time instantly made Auroracoin and the idea of airdrops go global.
Uniswap (UNI) Airdrop (2020): Rewarding early adopters of its groundbreaking decentralized exchange (DEX), Uniswap surprised users with 400 UNI tokens each, propelling the project to become a DeFi giant.
The ENS Airdrop: In 2021, the Ethereum Name Service (ENS) airdropped their token $ENS to more than 130k holders of the .eth domains. This airdrop is one of the largest airdrops in crypto history as the tokens which were distributed were valued at about $500m.

Why Projects Do Airdrops

Strategically, blockchain projects use airdrops for different purposes contributing to their development and sustenance. Community building is an important motivating factor. Providing tokens to a large number of people, projects reward loyal users who are interested in the development of the platform. Airdrops serve as an effective marketing tool; they drive hype and create headlines in the crypto world. Apart from that, Airdrops might serve as a means of decentralizing token ownership; thus, spreading the tokens among more and different people.

Conclusion:

This post marks the beginning of my series on crypto airdrops. Airdrops remain a popular way of distributing tokens and engaging with the community. Whether you're a seasoned crypto enthusiast or an expert, staying informed about the latest airdrops is very important, as they offer a potential avenue to earn substantial amounts of cryptocurrency. To learn more about participating in airdrops and staying informed of new airdrop opportunities in crypto, keep an eye out for upcoming content in my airdrop series.