Token Airdrop: An Easy Way to Build Your Cryptocurrency Portfolio

With the declining fortunes of the ICO market, a new practice that is sweeping across the sphere of token distribution is the Token Airdrop exercise. Token Airdrop is practically the distribution of free tokens to a selected number of active nodes of a blockchain network (usually the parent blockchain of the token). For example, holders of ethereum are eligible to receive new ERC-20 tokens launched on the ethereum blockchain.

Why Airdrop A Token?

Giving away free tokens might seem unwise, but over time this strategy has proved to be one of the most effective ways to create awareness for a new token. Startups that embark on the token distribution exercise may do so for a couple of reasons, some of which are elaborated below.

Even Distribution of Tokens

Cryptocurrency and the concept of tokenization is built around a philosophy of decentralization. This concept discourages the monopoly of powers within a given community. Since in most cases, the extent of one’s powers is determined by the relative percentage of stakes held, an uneven distribution of tokens will negate the decentralization concept. Therefore nowadays, developers set aside a percentage of the overall tokens to be airdropped for members of their communities.

Rewarding Early Adopters

We have seen projects launch bounty programs that offer tokens to participants who show interest in the project during the early stages. These usually serve as incentives for early adopters of the new token. Such incentives mostly come in the form of bonuses for investors who buy into the token sales especially at the early beginning. Most systems reduce the bonus percentage as the exercise continues until such bonuses are exhausted.

Airdrops Can Create Awareness

Other Airdrop exercises may involve developers distributing project tokens among participants of major social networks. This is aimed at initiating some curiosity among members of such communities and increasing the project’s social status and level of awareness among crypto users and beyond. This also doubles as an innovative way to counter the ongoing bans on ICO Ads by major social networks like Facebook and Google. Therefore, it is common for developers to reward people with free tokens when they perform tasks like:

Joining a Telegram channel
Following a project on Twitter and retweeting its posts
Promoting the token in some other recommended ways

Basic Eligibility Requirements


Eligibility for airdropped tokens involves access to a compatible wallet. For example, if the token is based on the ERC-20 standards, then only users with wallets that supports ERC-20 tokens can participate in the exercise. It is also important to note that wallets hosted on cryptocurrency exchanges cannot be used for receiving tokens during an Airdrop.

Active Addresses

Developers are known to consider participants that are active on the blockchain, therefore, some airdrops are designed to track wallet activities. This measure is put in place to ascertain that tokens are not sent to spam addresses.

Social Media Presence

Since it is common for ICOs to require people to perform tasks before receiving free tokens, it is important that Airdrop prospects own accounts on social media platforms like Telegram and Twitter.

Airdrops and Scams

Token airdrop is one of the few legit ways of getting free tokens, however, associated with all free things are scams and frauds. The crypto space is littered with fraudulent airdrop announcement or publications that aims to collect sensitive information from unsuspecting wallet owners. Therefore, it is important to verify that an airdrop is genuine. A few measures can be taken by individuals to check the credibility of Airdrop exercises. They include:

Check the community review of the airdropped token
Verify that a network is truly giving out free tokens by checking its official accounts.
Airdrops are free, therefore, any publication or announcement that requires people to transfer an amount of coin in order to get free token is a scam.
Token airdrop has become vital to the success of ICOs as it fuels the network as well as its token to prominence. In order to obtain news, reviews and alerts on airdrops users are advised to sign up for newsletters and join legitimate crypto communities.

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