NFTs are digital assets that allow for verifiable ownership via the blockchain.
NFTexplained.info is a team of long term crypto investors who are well versed in the crypto space and have the goal of providing the best information possible.
In this article, the team will break down the ways in which an airdrop can occur, how to find airdrops (including resources to help you), as well as discuss if airdrops are safe.
Let’s dive in; what exactly is an airdrop in the crypto space?
An airdrop is the free distribution of a cryptocurrency or NFT to a wallet – or even thousands of wallets. Typically an airdrop is triggered if some qualification is met. Airdrops are often used as a marketing technique to raise awareness for a project. NFT projects may airdrop a second NFT to holders.
When NFTexplained.info says it is a free distribution, the vast majority of the time that is true, if you are excluding gas fees.
In order to transact on the Ethereum network, a gas fee is incurred as a miner must be paid in the Proof of Work (PoW) system; any transaction including the transference of free tokens to a wallet will incur a gas fee. If you are interested in learning more about PoW systems, NFTexplained.info has covered that in an article; click here.
That being said, it is possible to receive tokens in your wallet without paying the transaction or gas fee. The team at NFTexplained.info has experienced tokens unexpectedly appearing in our wallets at no cost.
Typically, thousands of people are getting airdrops of a token because it gets people enraptured about the project. This marketing tactic is quite powerful as people are likely to research the token if they see it in their wallet.
In the NFT space, it is more common for NFTs to be airdropped – as a form of utility – by the team of the project as a way to add additional value. This is something that is referenced in NFT project roadmaps.
An NFT airdrop is often something to entice people to invest in a project as they are promised to receive two NFTs. That being said, if the project doesn’t see price appreciation, the second NFT won’t be worth much, if anything.
NFTexplained.info would recommend checking out our top ten tips for investing in NFT projects; that is linked here.
How Does A Crypto Airdrop Work? – What Triggers An Airdrop
Crypto airdrops are driven in three distinct ways. The first way is by holding a specific cryptocurrency or NFT. The second way is through doing a promotional task (e.g. entering your email). The third way is by simply using the blockchain as your wallet address will be public on blockchain explorers.
Airdrops work by developers sending an NFT or cryptocurrency directly to your wallet. Public wallet addresses are visible as the blockchain is transparent.
By holding a cryptocurrency, let’s say ETH, you could be rewarded or airdropped a token (let’s say a mythical, distinct coin, “EUM”). This often occurs for early adopters of a project and can be thought of as a reward. In this illustrative example, EUM is akin to an interest payment for ETH holders.
NFT airdrops typically involve connecting your digital wallet – like MetaMask – to a marketplace. This proves you are a holder of a certain NFT, e.g. a Top Dog from Top Dog Beach Club. Since the blockchain provides evidence you hold a Top Dog, you are able to mint a new NFT known as a Top Cat (as long as you pay for the gas or transaction fee).
Another example of this is the mega mutant serum airdrop from the Bored Ape Yacht Club. All holders of a Bored Ape were air dropped mutant serum that altered the appearance of the NFT. Airdrops are not merely low-value giveaways – a serum received an offer valued at an astonishing US $6.2 million or 1,645 ETH!
The second way involves doing some type of task for marketers of a project. By following them on social media or giving them your email, you in turn receive free tokens.
This exchange is a marketing investment by the owners of a project who now have your attention.
While it may seem like a loss for the developers of a project, this is not always the case. The increase in the price of the token could outweigh the price of giving away the tokens for free, especially if the developers hold some of the tokens or purchased them at a low price.
NFT investors have to be cautious about what information they share. It is important to be cautious of scams like rug pulls. Also, at no point should you ever give away your private key or send crypto to a wallet address.
The third common driver of an airdrop is the one in which you randomly see a new token in your wallet address; this is something the team at NFTexplained.info has experienced.
Companies are able to discover your public wallet address as it is visible to everyone on the blockchain.
Using blockchain explorers like Etherscan they can see all wallet addresses transacting with NFT projects or cryptocurrencies. Once they have your wallet address, they are able to airdrop tokens.
By doing this, projects are able to target a more specific audience – people who have purchased an NFT in a specific time frame – rather than just those who own crypto.
How Do I Get/Find Crypto Airdrops? – Airdrop Tool
There are often certain requirements that must be met to receive an airdrop; ensure you have followed protocols for eligibility. By looking at Discord, FAQ for a project, Twitter, and Telegram you can become aware of upcoming drops. Websites like earni.fi tell you about unclaimed airdrops.
The qualification for receiving an airdrop can range in one of the three ways that NFTexplained.info mentioned.
By searching ‘airdrop’ on Reddit, Twitter, and other platforms you may come across a compelling drop that you may be eligible for.
NFTexplained.info always advises being cautious; doing more research before coming to the conclusion that the airdrop is legit can save a lot of headache.
Lastly, websites like earni.fi tell you about unclaimed airdrops, however some drops are hidden as a premium plan is needed. The premium subscription to earn.fi currently costs US $21 per month.
By checking platforms you use for web3 and checking if they have an upcoming airdrop can be useful.
It is rumored that fractional.art, which is the largest fractional NFT platform, will release an airdrop. NFTexplained.info has a full article on how to use fractional.art, which is linked here.
It is also rumored that MetaMask will release an airdrop at some point as a developer from the team has hinted at it.
Are Crypto AirDrops Safe?
When it comes to the crypto space, there are many people looking to make a quick buck in a morally corrupt way.
As a general statement, the vast majority of crypto airdrops are safe. If you are actively searching for airdrops, it is recommended to use a separate wallet that doesn’t have funds. Always complete your due diligence and never give out your private key (only your public wallet adress).
Be cautious of visiting malicious websites related to a cryptocurrency.
If the airdrop is not commonly talked about or viewed by credible people in the space, NFTexplained.info would recommend using extreme caution.
Many airdrops require you to tweet some form of engagement regarding the project and it could be wise to create a separate Twitter if you are frequently doing this.
By taking five additional minutes to research, and by simply looking at the names of certain drops it is often easy to tell if they are a scam.
There should never be a need to send currency to another wallet address; always be cautious and think twice before investing your money in anything.
We hope you are just as excited as we are about NFTs and continue to stay informed at NFTexplained.info. To get the latest news in this rapidly evolving space, follow our team on Instagram & Twitter!