Jul 26, 2023 • 9 Min Read

What are Airdrops?

Crypto Airdrops are a unique growth and distribution mechanism that crypto protocols use to attract users and give them ownership of the protocol through the "airdropping" of tokens. Airdrops involve giving away tokens to selected users to generate interest, raise awareness, and attract potential users to the project. Most airdrops aim to distribute tokens to early users and backers of the project, ideally rewarding these early backers and incentivizing them to promote the project.

Certain airdrops have generated significant profits for users. For example, Uniswap, ENS, and Arbitrum airdrops gave users between $5k-$15k (on average) for using the protocol early enough. Given how lucrative airdrops can be, an entire strategy referred to as "Airdrop Farming" has emerged where users attempt to qualify for as many airdrops on as many wallets as possible.

Airdrop Process

The process of a crypto airdrop typically involves the following steps:

Announcement: The project announces the airdrop through various channels such as social media, forums, or dedicated websites. They provide information about the airdrop, including the eligibility criteria and the number of distributed tokens. It’s important to note that before the announcement, it often isn’t...

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