Crypto Airdrop – Is it risk to join?

In a crypto airdrop, a cryptocurrency project gives away free tokens to its community as a way to get people to know about the project. Airdrops are a fun way to get people excited about a new product or service, bring in new users, or reward users who stick with you.

Types of crypto airdrops

There are many types of crypto airdrops. I will list some of the main types below:

  • Standard airdrop: A normal cryptocurrency airdrop is an event that anyone who wants to join can do. Most of the time, you only need to create an account with the project and that’s it. When individuals meet the requirements, the project sends a small amount of the new cryptocurrency to wallet addresses that are eligible. People who want to take part in a standard airdrop must act quickly because spots are limited.
  • Bounty airdrop: As a way to market, bounty airdrops give away crypto assets in exchange for taking part in promotional activities. These tasks can be as easy as signing up for a newsletter or as complicated as sharing project-related content on Twitter, Facebook, and Instagram.
  • Holder airdrop: Holder airdrops give people rewards just for having a certain project’s token or coin. Usually, these kinds of airdrops happen when a project hard forks, splits into two platforms, or starts on a different blockchain. Airdropped participants will receive a set amount of cryptocurrency based on a snapshot of their wallet addresses.
  • Exclusive airdrop: An exclusive airdrop is when a project picks a small group of people to give tokens to as a reward. This kind of airdrop is more centralised and is meant for people who are closely connected to the project. Potential selection criteria could include how involved they are, how much time they spend on the project, or how many non-token activities they do.

How does a crypto airdrop work?

Launching a public campaign is the first thing that a crypto or blockchain project does when it decides to launch via airdrop. The group promotes crypto projects on Discord, Reddit, Twitter, and other forums and social media sites.

The team decides what kind of crypto airdrop to use and makes a list of people who might get tokens during the public campaign. Additionally, crypto projects can use the campaign to learn more about the people who might be interested in using their products or services.

The project then makes an airdrop bot, which is either a smart contract or a self-executing programme. The team then chooses a time for the smart contract to give the allocated participants tokens or coins from the company’s treasury wallet. The team shares the airdrop transaction block results to earn the community’s trust that it has built up during the campaign.

Airdrops are treated as income in some countries, like the US. This means that if you get some “free tokens,” you’ll have to pay taxes on them, even if you didn’t want the airdrop in the first place. People who get crypto through airdrops also have to pay transaction fees for the crypto in their wallets.

Is it risky to join?

Crypto airdrops are a good way to find out about new projects and get free tokens. There are, however, some risks that come with taking part in airdrops.

For many people, the biggest risk is that airdrops could be a way to steal their cryptocurrency or personal information. Scammers may make fake social media accounts or websites for airdrops to get people to give them their private keys or send them cryptocurrency.

There is also the chance that airdropped tokens will not be worth much or anything at all. Some projects may give away tokens to get people excited, then sell the tokens they still have for a profit, leaving people who got tokens through an airdrop with useless tokens.

Overall, crypto airdrops can be a great way to earn free tokens and learn about new projects. However, it is important to do your research before participating in any airdrop to avoid scams and worthless tokens.