Projects live or die on their ability to attract users. The crypto space is no different. But it does have a unique advantage. Blockchain projects can create their own tokens and use them to encourage people to start using their products. One of the key ways projects can do this is via a technique called Airdrops.

We explore this type of token distribution below.

What are airdrops?

Airdrops are a method of distributing tokens to users or potential users. More recently, they’ve been used to create DAOs by transferring ownership and responsibilities from a core team to its decentralized users.

They can be used to do a number of different things:

  • Reward loyal customers
  • Generate excitement around a project
  • Identify potential customers open to new products or services
  • Incentivize followers to perform certain tasks that help the project grow, whether that’s sharing social media posts or creating an account on a platform.

Who came up with the idea?

It’s unclear who specifically came up with the concept of airdrops. OmiseGO, a banking service built on Ethereum, claimed credit for the technique in 2017 after it distributed its tokens to followers.

How do airdrops work?

There are typically two different types:

  • Announced: Airdrops with a fixed date and time frame for release are designed to generate buzz among the crypto community and often have specific tasks attached in order to be eligible.
  • Unannounced: These airdrops involve selecting wallet addresses and randomly dropping tokens without the user knowing where they came from. These are typically used to surprise and…

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