Several cryptocurrency projects follow the marketing practice to promote new tokens or associated products, called Crypto Airdrop. A cryptocurrency startup uses this practice to give out its tokens to potential customers for free. However, the participants may occasionally need to perform a few promotional tasks to redeem their free airdrop tokens.

But why would a corporation offer free coins or tokens?

On the other hand, giving something out for free creates public hype and excitement about it without spending a lot of money. In the cryptocurrency market, it is a common tactic for companies to introduce new tokens and give a certain amount of them away for free to selected individuals.

Since individuals who receive a cryptocurrency airdrop for free want its price to increase, a crypto project also creates a community that supports that token in this way. As a result, they begin religiously pushing it.

How Crypto Airdrop Works

The operation of crypto airdrops is dependent on how they are dispersed.

Crypto projects may require individuals to participate in promotional activities for their new tokens. It entails following social media accounts and sharing their material. Some projects need participants to possess another coin or token to get airdrops. Furthermore, some airdrops need acts other than signing up and entering a crypto wallet address where you want the free cryptos to be sent.

Once the user successfully satisfies the project's specified requirements, the airdrop organizer transfers the free tokens to the wallet address of the eligible user. Smart contracts may sometimes perform the whole airdropping procedure by checking the user's eligibility and initiating the transaction accordingly. As a result, the new coins appear in the wallet addresses of the participants.

Common Types of Crypto Airdrops

Airdrops of cryptocurrencies have been around for a while. This marketing ploy has taken several shapes throughout the years. Here are some of the most common forms of airdrops sent by currency startups to promote a virtual currency.

Standard Airdrop

A standard airdrop is open to everyone. Small chunks of the new currency is distributed to wallet users in exchange for a service, such as signing up for a newsletter or opening an account at a virtual currency project, like standard airdrops.

Before receiving the airdrop, you may be required to perform a KYC (Know Your Customer) check or provide your email and wallet addresses

Bounty Airdrop

Tokens are given to individuals encouraged to help promote a blockchain project through reward airdrops, typically on social media sites. Users often acquire the tokens after retweeting messages about the project, following the company's Twitter account, sharing a post on Facebook, promoting an Instagram post, and so on.

You may occasionally be allowed to refer others to the network to earn extra reward airdrops.

Exclusive Airdrop

This form of airdrop is only available to ardent supporters of a specific virtual currency project or blockchain community. Airdrop websites and aggregators frequently host exclusive airdrops, giving first dibs to regular followers of airdrops released by promising blockchain projects.

Holder Airdrop

As the name implies, these airdrops are typically distributed to individuals who already own certain tokens or coins of another cryptocurrency kind. For example, members of the Ethereum blockchain community have occasionally been granted free tokens from a new virtual currency project launched on one of their blockchains.

Hard Fork Airdrop (not a typical one)

A hard fork happens when developers alter the protocol code to produce a new version of the blockchain and, as a result, a new token. The original blockchain and currency continue under the current system, while the new token functions under the modified protocol.

Users who owned the original currency receive an equivalent amount of the new token in their wallet addresses when the "chain split" occurs.