Free Crypto Airdrop

A crypto airdrop is a marketing strategy that includes sending free cryptocurrency to users’ wallet addresses. More specifically, it is a promo activity commonly undertaken by blockchain-based startups to start a crypto project.

The coins and tokens may typically be distributed in exchange for an undemanding promo service. The goal of an airdrop is to raise and spread awareness of the blockchain project, as well as to spur people to trade the given cryptocurrency. The primary idea behind this undertaking is to send freshly minted crypto to different wallet addresses. The recipients are expected to engage in the new corresponding project, even by learning to swap or cash out free tokens.

Typically, airdrops are promoted on social media, crypto forums, and the airdrop organizer’s website. One fact should be noted, though: usually, free crypto won’t be sent to everyone, but only to specific wallets. Mostly, the recipients are chosen according to the blockchain network or coins they hold in the wallets.

The concept of crypto airdrops could be compared to coming across a free discount card in your mailbox inviting you to pay a visit to a new store in your neighborhood. While the primary goal of the discount card is to encourage you to spend money, this needn’t be the case with the crypto airdrop. Rather, the focus is on raising awareness and spreading the word about the new project.

In the majority of cases, crypto airdrops are advertised as free. However, you may need to invest some effort and time to obtain them as they are issued in exchange for completing a task. This can include, but is not limited to:

This can include, but is not limited to:

• Following the company or another account on social media;
• Sharing or retweeting a post (hashtags may be included);
• Sending or receiving crypto via a specific network or wallet;
• Registering an account and subscribing to receive updates.

Normally, there might be cases when crypto airdrops are issued without requiring you to do anything whatsoever.

What you should never do is pay to participate and get free coins and tokens. More on this later.

Cryptocurrency airdrops differ from one another by their characteristics. What they do have in common is that they are marketing tools for growing a project. Yet, based on the goal they are looking forward to achieving (raising brand awareness, attracting new users, rewarding first clients, etc.), they can be categorized into several groups.

Standard airdrops

In this type of cryptocurrency airdrop, participants only need to state they’re interested in receiving free crypto. No specific information or tasks are required except for providing a valid wallet address.

As standard airdrops typically have limits on the amount of crypto that is to be distributed, this implies that individuals will also receive a limited number of tokens. For this reason, these airdrops are typically time-sensitive.

As there is always catch 22, this is the case with standard airdrops as well. Despite the popularity of this event, sometimes free tokens might be a bit harder to get. The reason behind this is the event’s simplicity and the absence of preconditions, so users can provide an unlimited number of wallet addresses. As a consequence, the crypto airdrop amount may be drained in no time.

Bounty airdrop

To take part in a bounty airdrop, participants must perform specific tasks. The tasks frequently involve spreading the word about the project in social media posts in which the company is tagged. Participants who recruit other users, subscribe to the project’s newsletter or join a company’s channel on Telegram or Discord may receive referral bonuses or finder’s fees.

As a reward for carrying out the tasks, participants get points corresponding to the amount of airdrop they have received. To be eligible for the airdrop, participants might be compelled to earn a specific number of points beforehand.

Holder airdrop

Holder airdrops give away free crypto to individuals who have already had a particular amount of the crypto in question in their wallets. How much crypto the participants are eligible to receive is determined according to a snapshot of holdings at the given date and time. The airdrop is directly proportional to users’ crypto holdings — the more they have in their balance, the more they will receive.

Expectedly, there is always a minimum you should meet to qualify for the airdrop. In case you fail to meet it, you won’t be granted free coins and tokens.

Exclusive airdrop

An exclusive airdrop refers to an event in which specific participants are individually chosen to join the airdrop. The selection criteria may not necessarily be how much crypto they hold in their balance, but the time they spend on a project, most money invested in non-crypto activities, or the number of posts shared in a forum.

This type of airdrop is a more centralized method of rewarding participants who are the closest to the project. Hence they may grant tokens to those who may not have any crypto in their wallets.

Raffle airdrops

A raffle airdrop may be combined with some of the previous types. Frequently, a project announces the number of airdrops that will be distributed and invites participants to earn a raffle ticket by holding crypto, earning extra points, or expressing interest.

Expectedly, the number of airdrop participants exceeds the number of airdrops that will be given away. Thus, a raffle takes place and a limited number of wallets are chosen randomly to get an airdrop.

Whenever there is “free money” involved, there is a risk of a scam. Therefore, in spite of the popularity of crypto airdrops, they may not always be risk-free. Remember, the ultimate purpose of legitimate airdrops is pure promotion, so they will never ever ask for any initial capital investments.

There have been (and will be, unfortunately) crypto airdrops that are typical pump-and-dump schemes. More particularly, a creator develops a token hoping that there will be enough promotion and hype for it to be listed on exchanges. As soon as crypto platforms list it and start trading, the developer sells a considerable amount of their tokens, which results in a price crash.

Another potential pitfall is the so-called dusting scam. A fraudster sends a small number of coins to an unsuspecting user aiming to intrude on their privacy. Next, the scammer inspects the transaction activity of the distributed tokens in order to de-anonymize a wallet holder.

Numerous airdrop scams count on instructing a crypto enthusiast to connect their wallet to a phishing website to claim the airdrop. The faulty address will ask a user to link their wallet using well-known services. However, once they add the wallet by giving away their private key or secret phrase, the scammer achieves their goal.

To avoid falling prey to ever-growing crypto scams, you need to be extremely cautious. Always research the project you want to invest in or claim assets. Also, never link to websites with which you’re not familiar. Stick to the familiar websites that you plan to visit — you may even consider bookmarking them so that you’re always sure you’re connecting with the right website.

Companies advertise airdrops and promotions on their social media channels, forums, etc. To stay up to date with upcoming events, consider following their social media accounts. However, you need to be vigilant here as more complex scams might imitate social media profiles. Keep a watchful eye and remember: if it seems fishy, it probably is.

To be on the safe side, you can create a wallet that you will use specifically for airdrops. Having received the free crypto, you can transfer it to the primary wallet. This way, you will keep your funds safe and reduce the risk of a scam.

Since crypto airdrops are launched for promotional and marketing purposes, sometimes it may be tricky to know whether you can qualify for the upcoming event as well. Each airdrop is specific, with individual eligibility requirements.

To find new airdrops and learn whether you qualify or not:

• Subscribe to the CEX.IO newsletter. Once a new event occurs, you will be notified by email.
• Follow CEX.IO on Facebook and Twitter and check if there are any news and events. You can also join CEX.IO on Telegram.
• Actively use various crypto products and services on CEX.IO.
• Follow our Giveaways and Contests to stay up to date with upcoming events.

Remember, the primary requirement for obtaining a crypto airdrop is possessing a wallet with some crypto coins and tokens in it. If you don’t have any, you may need to deposit or buy crypto. A valid wallet address is a must — otherwise, you won’t be able to receive or claim the airdrop.

If you have never purchased crypto coins and tokens before, the very first step is to register an account at a cryptocurrency exchange. Finding an exchange might seem easy at first glance, but this is a step you mustn’t take for granted.

Namely, crypto markets are packed with crypto platforms but not all of them are vetted and regulated. This can put your funds and credentials at risk, so going for such a platform should never be an option. Do your due diligence and register at a platform that complies with all the regulations and legislation of your place of residence.

Established in 2013, CEX.IO is among the oldest crypto exchanges. The near-decade of putting customers before profit, striving to provide the best quality services, and being a faithful guide to its customers on their crypto journey helped CEX.IO cement its position as a leader in the crypto industry.

To start trading cryptocurrency at CEX.IO, you need to register an account first. Fill out the form, provide your name and a valid email address, and your account is almost ready. Next, upload a scan of your ID or passport to confirm your identity, and you’re all set to enjoy the benefits of the CEX.IO ecosystem.

Next, select a payment method that works best for you. CEX.IO supports a variety of options, so you can choose from:

• Credit or debit cards (Visa and Mastercard);
• E-wallets (Skrill, PayPal, Epay);
• Wire transfers (domestic and international);
• Apple Pay and Google Pay.

Having selected the payment service you’re all set to buy Bitcoin with a credit card, buy Bitcoin with PayPal, or buy Bitcoin with Apple Pay. Of course, you can buy any crypto with Skrill or with other payment methods.

The fastest way to purchase crypto with CEX.IO is by using its Instant Buy product. Just follow a few simple steps and you’ll have your favorite coins and tokens in your balance in minutes.

• Step one: hit the Instant Buy product on the CEX.IO website.
• Step two: choose the cryptocurrency from the drop-down menu.
• Step three: enter the amount you’d like to purchase or choose from a pre-calculated pack.
• Step four: click Buy now to finish the transaction.

And there you go! As simple as that!

Do note, however, that to buy crypto this way, you need to link your credit or debit card to the CEX.IO account. If you haven’t done so before purchasing, CEX.IO will ask you to add it.

Depending on the jurisdiction of your place of residence, crypto airdrops may or may not be subject to taxes. In the U.S., according to a participant’s Federal income tax return, crypto airdrops are regarded as income.

The challenge of reporting taxes on a crypto airdrop is that the cryptocurrency might not yet have liquidity or a taxable market value. Ideally, an airdrop should be deemed as profit according to its value when received. Besides, airdrops aren’t regarded as taxable income until a participant receives and is able to trade them. As long as they are locked or on a vesting schedule, they aren’t taken as taxable income.

Taking into account the massive rivalry and competition among blockchain-based startups, an airdrop is a great option to draw attention and stand out from the crowd. But as is the case with everything, there are advantages and disadvantages of crypto airdrops.

Pros

The greatest and primary advantage of airdrops is they help raise awareness of a specific blockchain project and help its adoption. The act of distributing free coins and tokens contributes to spreading the word and generating interest in a project that could have been unseen.

In addition, airdrops are an exquisite method of distributing crypto to a massive number of people quickly and effortlessly. This further helps build a solid community around a project and create a group of crypto enthusiasts ready to invest in its success. In addition to promoting the project, there is space for providing feedback and improvement suggestions, which might be more than beneficial for a blooming project.

Specific crypto airdrops serve as a way to reward faithful patrons of particular blockchains. After all, sending extra crypto to all wallets or rewarding existing holders is something that doesn’t occur naturally and every day in the crypto market.

Cons

While beneficial, crypto airdrops might be risky for companies for several reasons.

First, airdrops can be a considerable drain on resources, as they demand a lot of time and effort to be organized and executed. Plus, there is always a risk that recipients won’t implement or accept distributed tokens. Should this happen, the airdrop will turn out to be a failure.

Second, crypto airdrops can be an easy target for fraudsters. Namely, scammers can build a fake cryptocurrency or a blockchain and airdrop free tokens to unsuspecting participants to spur them to start investing in the project. As soon as they start investing, scammers will take the funds and disappear, leaving victims wondering what has happened.

Third, airdrops may lack liquidity. As such, they can’t be traded on open exchanges, which makes them worthless. The project can be claimed to be worth thousands of dollars at the beginning, but if users aren’t able to trade distributed tokens openly, the free crypto is of no use.

Cryptocurrency airdrops are undoubtedly an excellent way to promote and raise awareness of a blockchain project. Additionally, it is a method of boosting liquidity by distributing it to numerous wallets.

However, users need to be vigilant here. Although crypto airdrops have a certain value and can be regarded as free money, they carry significant risks. Therefore, users need to be careful not to fall prey to potential scams.