What is an Airdrop in Crypto?

Blockchains and cryptocurrencies continue to challenge traditional financing ideas. Project developers have taken advantage of these innovations by introducing new ways of marketing and advertising. Airdrops is one such recent development that helps promote cryptocurrencies.

What is an AirDrop?

An airdrop inserts free cryptocurrencies into the wallets of early adopters. Investors who buy a cryptocurrency early will be rewarded for their loyalty. Everyone loves free money, which is why awareness and excitement are created around a project.

Types of air droplets

Proactive airdrops provide free cryptocurrencies from the start. Investors can use sites like airdrops.io to find projects that offer free cryptocurrencies on a given launch date. The idea is that by buying early, the word will eventually spread and more people will start buying the cryptocurrency. Prices are rising and those who have bought early are being rewarded.

Retroactive drops occur at a later time and often occur by surprise. Cryptocurrency users can wake up one day and see a new cryptocurrency in their wallet. This is what happened to investors who bought the famous Bored Ape Yacht Club NFTs. Those who kept a Bored Ape at all times, whether they sold it or not, were rewarded with a new deposit of APE coins. Sorry for the pun, but this airdrop was literally a sign of gratitude to those who helped make the Bored Ape Yacht Club NFTs so popular.

Buyers beware

Although they seem like an easy way to make money, airdrops are usually too good to be true. Like all other cryptocurrencies, they tend to rise and especially lose value.

Projects use airdrops to attract investors. More often than not, these projects offer no real long-term benefit. They use airdrops to capture attention and create discussion. Clearly, most are scams.

Usually, a small group of developers who have created the cryptocurrency promote an airdrop to try to drive up the price dramatically. A well-publicized airdrop, even if it has no real benefit, can attract investors and drive up the price. The developers then sell all their holdings and the investors who are not part of the original group are left without money.

One last warning

Be extremely careful when searching for parachutes. The vast majority of them will not keep their value. In addition, some of these airdrops will ask you to provide personal information such as an email address. If you are asked for other information, be careful. And above all, never hand out your private keys. If someone has your keys, they can access all your money.

There are legal airdrop operations. The APE coin drop is very new, but it can exist for a long time and provide real benefit to the Bored Ape Yacht Club community. There is speculation that APE holders will be allowed to vote on Community matters, much like a governance token.

Airdrops can be a mutually beneficial way to explore the crypto world. Developers can find new use cases, and early adopters can benefit from price increases.

However, we must be careful: Not all airdrops are lucrative. Most are scams and have no long-term use. Do your research, never give away your keys, and always be skeptical of new projects.

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