As a player in the cryptocurrency market, you will definitely hear people excitedly talking about "airdrops" in related chats or social media. So what exactly is an airdrop and how does it work?
What is an Airdrop?#
An airdrop refers to a project sending a certain amount of cryptocurrency assets for free to people who meet specific conditions.
For example, Uniswap, the most popular decentralized exchange (DEX) on Ethereum, released its own UNI token to counter a competing DEX that was trying to take away Uniswap's liquidity. To reward existing users, the project sent half of the total token supply to users' wallets. These tokens act as a moat, helping to retain users from competitors.
Why Airdrops?#
Airdrops are an excellent way for new projects to immediately create users by giving a large number of people a reason to use their product. Typically, the most difficult part of creating a new cryptocurrency project is establishing a large and active user network. Airdrops allow cryptocurrency projects to have a large number of potential users right away, which is one way to accelerate this process.
Airdrops are also used to strengthen the community of a project. They can give users a stake in the project's success, encouraging them to contribute to the project's growth in any way possible. Airdrops are often a reward for early users, a way of saying "thank you" and creating additional loyalty.
Airdrops are a good way to promote a project. They can attract a lot of attention and increase people's awareness of the project's products and services.
What is "Loot Airdrop"?#
"Loot Airdrop" refers to actively participating in and seeking various cryptocurrency projects' airdrop activities to obtain free tokens or digital assets. The term "loot" in this context means actively participating and acquiring. Loot airdrops typically involve completing a series of tasks or registrations on the project's social media, forums, or official channels, and receiving project tokens as a reward. This is a common way for people to obtain tokens from new projects early on and have the opportunity to benefit from them.
For example, in 2020, Uniswap airdropped 400 UNI tokens to each address that had used Uniswap. With UNI later rising to $45, the highest value of a single address's airdrop reached $18,000, and the value of airdrops received by users who used Uniswap batch tools reached tens of millions of dollars.
How to Participate in Airdrop Activities#
Participating in an airdrop usually requires following a series of steps. The specific steps may vary depending on the project, but generally include the following:
Find Airdrop Information
In general, project teams will announce airdrop activities in their official communities, social media, and website news. Participants can find relevant information about the activities on these channels. Additionally, websites like CoinMarketCap and Feixiaohao have dedicated sections where they publish detailed information about new project airdrops. By keeping an eye on the announcement sections of cryptocurrency exchanges like Binance and FameEX, participants can easily obtain firsthand information about airdrops.
Understand the Project's Potential
Before participating in an airdrop, it is best for participants to have a detailed understanding of the project and confirm that it is trustworthy and has good development potential. Generally, token projects that can be listed on high-quality cryptocurrency exchanges like Binance and FameEX or participate in joint airdrop activities are considered to be of higher quality and can be trusted.
Create or Use a Wallet Address
Many airdrops require participants to have a specific type of cryptocurrency wallet. Therefore, creating a suitable wallet or using a wallet that meets the requirements is necessary to ensure that it supports the airdrop tokens being participated in.
Participate in the Airdrop Activity
According to the airdrop requirements, participants may need to register or perform specific tasks on the project's official website, including providing email addresses, social media accounts, ETH addresses, etc. It is important to carefully read and understand the airdrop activity rules during the participation process in order to comply with the relevant rules and maximize the airdrop rewards.
Wait for Verification
Once registration and tasks are completed, participants need to wait for the project team to verify their eligibility. This may take some time, so please be patient.
Claim Rewards
If participants meet the airdrop conditions, the project team will distribute the airdrop rewards at a specified time. These rewards are usually sent to the wallet addresses provided by the participants.
Stay Vigilant
Due to the relatively substantial returns from airdrops, there may be fraudulent projects or phishing addresses that issue false or deceptive airdrop activities. Therefore, please make sure to only participate in airdrops from trusted projects and do not disclose personal information or private keys.
Participate in Multiple Airdrops
Participants can choose to moderately participate in multiple airdrops to increase their chances of obtaining free tokens.
Track Token Value
After receiving airdrop tokens, participants should keep track of their market value and manage or sell them as needed.