Connect with us

Don't Miss

Airdrops: Why startups give out tokens for free and how to receive them?

Published

on

Airdrop
READ LATER - DOWNLOAD THIS POST AS PDF

What is an Airdrop?

According to an ambassador of SnowFox Technologies, blockchain enthusiast and international entrepreneur Mike Raitsyn, crypto Airdrop can be defined in the following way:

“crypto airdrop is the way of distributing project tokens (or any other token) among a predefined group of participants. The distribution of tokens during airdrop can be carried out randomly within the blockchain network or on a predetermined basis”.

It is the distribution of free coins. Literally free coins. While it may sound too good to be true, there is a logical explanation why this is done. It is organized by projects mainly to reward users for their loyalty, to create awareness about their token, to create an initial base of token holders, to aid decentralization and even to generate a database of holders which can be utilized for marketing further in the lifecycle of the token.

There are two ways in which tokens are airdropped. One is where they are dropped as a surprise – without the recipient having to do anything – and second is pre-announced where the recipient might be required to complete certain tasks or sign up for the airdrop.

Airdrops usually create a bigger buzz in the community and spread awareness faster than just ICOs because of the inherent advantages, primary among them being no risk but unlimited upside to the recipient.

As projects these days go for a fully funded private sale for convenience as well as regulatory reasons, many projects also choose to avoid the public sale or ICO altogether. Regardless, an airdrop can be used instead of a public ICO or to raise awareness as a complementary exercise.

How does it work?

Airdrops are conducted in various ways. Some of the key differences are:

User action

Airdrops that come as a surprise may be a result of a recipient just holding tokens from a certain blockchain in their wallets or even on an exchange. These tokens might be created as a result of a hard fork, as in the case of Bitcoin Cash and several other forks that were created last year. In such cases, a snapshot is taken at a particular date / time of all the wallets holding Bitcoin and then those wallets were credited with Bitcoin Cash. There is no action from the user’s side. Even exchanges support such airdrops and all a user has to do is hold. Another popular token, EOS has had over 10 airdrops.

Second type, where an airdrop is announced and the user has to take action. This is called a bounty. This could involve signing up on their website, submitting KYC documents, joining their telegram group or following them on Twitter. One such coin, Polymath airdropped 250 tokens for users who signed up on their site and completed KYC requirements. At its peak, these token were valued at $400.

Frequency

Sometimes there is no hard fork but holders of a particular chain still get new tokens credited just for holding a particular token. For example, OmiseGo airdropped their tokens to Ethereum holders. Some coins do this as a one-time activity and some coins have recently started doing this as a regular activity. This is to encourage users to hold the tokens long term rather than buy it for a one-time event of an airdrop and then sell them back creating an artificial temporary pump in price.

An example of an on-going airdrop is OCN. OCN airdrops OCP, which is projected to be similar to GAS for NEO, every month by taking a snapshot and the average number of OCN tokens held by a wallet per month will be used to calculate the number of OCP tokens airdropped to a recipient wallet. This airdrop is spread across 50 months to ensure only loyal holders of the token get maximum benefit.

Fixed quantity versus pegged

Some projects give away a fixed amount of coins per wallet / user / account whereas some peg it to the percentage of the tokens held. For example, ONT airdrop was pegged to the number of NEO tokens held by a wallet where for each NEO you would get 0.2 ONT.

Most famous Airdrops

While there is no harm in free money, some airdrops are etched in our memories as some of the biggest ones. While we already discussed Bitcoin Cash hard fork which was one of the most famous airdrops, here are a few others:

Ethereum Classic and Callisto

Callisto token (CLO) was distributed to ETC holders (1:1) in March and there was a lot of excitement because CLO is a Cold Proof of Stake token. ETC price surged to a 6 month high in Satoshi terms.

Stellar

Stellar Lumens held an airdrop of 16 billion tokens last year where every holder of Bitcoin got a proportionate amount of Lumens. The amount each recipient got was pegged to the percentage of total bitcoins in circulation owned by the recipient at the time of the snapshot.

Main mission

Why do projects conduct these airdrops is a question often asked.

Reward for loyalty

Airdrops are a good way to incentivize loyal holders to keep holding the token in face of price volatility. In fact, airdrops that have a dispersed frequency of snapshots are very effective in this as they do not reward short-term traders but only the long-term holders.

Limited reach of ICOs

Some projects view this as a way of distribution and adoption that is better than an ICO. ICOs are risky for investors and losing trust due to various scams. They also have a long period of token distribution when the investor funds are locked. Lastly, the token value in an ICO is arbitrarily decided by the project team whereas in an airdrop it is decided by the free market once the token is traded on an exchange. Airdrops can be a good way to reach out to more users and expand the base with or without a public ICO.

Awareness and marketing

The main reason for the rising popularity of airdrops is the marketing side. It creates awareness since more investors sign up for an airdrop that provides not downside but an unlimited upside rather than an ICO. When bounties such as social media sharing are attached to airdrops, projects can easily go viral. And if users sign up on the project website, it creates a database of leads which can be used for marketing further down the road.

Future airdrops

Some of the interesting projects holding their airdrops in the near future are Everipedia, Biotron, Prandex, Kava, Fast Invest.

While there are always projects to look out for, sites like http://airdropaddict.com/ and https://airdropalert.com/ that are useful to track interesting airdrop opportunities.

How to launch an Airdrop?

A lot of decisions need to be taken into account while launching your own airdrop. It is wise to have a software to handle the airdrop. SnowFox Technologies provides an airdrop platform that is designed to spread the word while complying with regulatory requirements with their in-built KYC verification feature.

Snowfox Technologies has developed the Promo Token technology, which allows fast and efficient token distribution to potential investors so that up to 1,000,000 addresses can receive tokens at 5-10x cheaper compared to other solution on the market.

And for corporate entities who wish to integrate and create tokens in their businesses to increase the efficiency and customer trust, they help them design and set up a customized solution.

Airdrop trends

While there is no research or no statistics about the number of airdrops and the value created through them, it is apparent that airdrops are getting more popular than ICOs. With hundreds of them every month, this trend has just started.

Word of caution

Scams are everywhere in the crypto community. Airdrops are no different. Keep in mind that you should never send your private keys for an airdrop nor send any money or crypto for the airdrop. If you follow these guidelines, you will be safe and make some free money on the side.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Blogs

Is Tether (USDT) really a stable coin?

Published

on

Tether
READ LATER - DOWNLOAD THIS POST AS PDF

Tether is one of the top digital assets in the crypto-sphere. The coin was launched in November 2014 after it changed its name from Realcoin so that the crypto community doesn’t associate it to the altcoins. It is important to know that Tether is a currency that helps to convert fiat currencies into digital currencies.

Moving forward, there have been lots of FUDs around Tether these days as regards to whether it is going to be a truly stable coin as the market has seen dips lately. Also, the FUDs around Tether have raised questions on whether there are any backings to the digital asset.

It is crucial to know that other factors have been attributed, and one of them was a report from last month that stated that Tether and Bitfinex, had gone their separate ways with Noble Bank. The separation made Bitfinex suspend fiat wire deposits – without no reason or whatsoever.

Tether, in regards to market worth, comprises about 92 percent of the market capitalization of stable coins. Also, this stable coin offers two purposes: to stabilize the volatility of Bitcoin, and also to preserve the amount of money purchasing power investors have at hand when the value of larger cryptocurrencies such as BTC drops.

The coin is a good alternative for traders when trying to cash-in on fiat currencies, as we do know that trying to move money from different exchanges to fiat…

Continue Reading

Don't Miss

Using Blockchain with Benefits to Your Business: Simple Explanations

Published

on

blockchain
READ LATER - DOWNLOAD THIS POST AS PDF

Let’s talk about cryptocurrency today. Although people say either “yes” and “no” to the digital money, this technology can be used in almost any business field. So what’s the reality? Can a business obtain any financial profit and benefit from using blockchain technology in its operations? Let us get all this straightened out.

Why Blockchain Is Beneficial for Business

Key advantages of blockchain technology are transparency and safety. The actions of all system participants are clear, this prevents the falsification of information and its leakage. Due to the fact that there is no single data center, the data cannot be deleted, for example, during a hacker attack. Thus, any blockchain development company can benefit a lot.

What is more, blockchain is beneficial for companies as a mean of simplifying and cutting costs for many business processes. Potentially, this technology is capable of eliminating many intermediaries during transactions or any other business operations. So it’s not surprising that the technology has quickly become popular with firms working in different industries around the globe.

According to the analyst firm Transparency Market Research, the industry will reach up to $20 billion by 2024, showing an annual growth of over 59%. The next big step towards the development of the technology is to assign a legal significance at the state level for it. This will expand all the scales and limits of the technology.

Continue Reading

Don't Miss

Elon Musk hits the world of cryptocurrency

Published

on

Cryptocurrency
READ LATER - DOWNLOAD THIS POST AS PDF

Yesterday, the world woke up to the shocking news that Elon Musk has made a conscious decision to enter into the cryptocurrency world with his startup organization, The Boring Company that now accepts Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.

The Boring Company Brief History

Sometime back in mid-2016, Elon Musk revealed his intentions of taking his latest business idea underground. The young serial entrepreneur who also happens to be the CEO of SpaceX and Tesla revealed his plans in April 2016 for the Boring Company, a business venture that focuses on exploring ways to cut tunneling costs with the intention to alleviate traffic overcrowding on roadways and freeways.

The Boring company was founded in 2016 and is guided by the mission to work tirelessly to eradicate traffic jams by constructing a web of underground tunnels that are meant to facilitate a new way to move from one location to another quickly. With the construction of its first test tunnel in LA, Elon decided to trade a line of unique products that include hats and the now well-known Not-A-Flamethrower, a line of businesses to promote the project.

You can now buy the company’s unfamiliar fire-related products using the four leading virtual currencies in the market, in addition to the traditional modes of payment. The Boring Company also selected Coinbase Commerce to be their payment processor for their virtual currencies transactions.

At the time of writing, the flamethrower is exchanging at…

Continue Reading

Elite