Blockchains and cryptocurrencies continue to challenge traditional ideas about finance. Property developers have taken advantage of these innovations by introducing new ways to market and advertise. Airdrops is one such recent development that helps promote cryptocurrencies.
What is an AirDrop?
An airdrop deposits free cryptocurrencies in 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 is generated around a project.
Types of air droplets
Proactive airdrops offer free cryptocurrencies from the start. Investors can use websites like airdrops.io to find projects that offer free cryptocurrencies on a specific launch date. The idea is that by buying early, the word will eventually spread and more people will start buying the cryptocurrency. Prices go up and those who bought early are rewarded.
Retroactive drops happen at a later date and are often done by surprise. Cryptocurrency users may 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 always had a Bored Ape in their possession, whether they sold it or not, were rewarded with a new deposit of APE Coins. Excuse the pun, but this airdrop was literally a token of gratitude to those who helped make the Bored Ape Yacht Club NFTs so popular.
Even though they seem like an easy way to make money, airdrops are usually too good to be true. Like all cryptocurrencies, they can rise and most importantly lose value.
Projects use airdrops to attract investors. More often than not, these projects offer no real long-term benefit. They use airdrops to grab attention and spark discussion. Obviously, most of them are scams.
Usually, a small group of developers who created the cryptocurrency promote an airdrop to try to drive the price up dramatically. A well-publicized airdrop, even if it’s of no real use, can attract investors and drive the price up. The developers then sell all their assets and the investors who are not part of the original group run out of money.
One last warning
Use extreme caution when looking for air parachutes. The vast majority of them will not hold their value. In addition, some of these airdrops will ask you for personal information such as an email address. Be careful if you are asked for other information. And most importantly: never hand over your private keys. If someone has your keys, they have access to all your money.
There are legitimate airdrop operations. The APE coin drop is very new, but it may have been around for a long time and really be useful 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 world of crypto. Developers can find new use cases and early adopters can take advantage of price increases.
However, we have to be careful: not all airdrops are lucrative. Most of them are scams and have no long term use. Do your research, never give away your keys and always be skeptical of new projects.