Did you buy an NFT in the last year?
Then you might get a piece of a $400 million “airdrop.”
Here’s everything you need to know about how token airdrops work.
This article was inspired by Coinvise. To read their full article, click here.
Token airdrops are free tokens distributed by projects to incentivize the use of their blockchain-based platform.
Here are 3 benefits to token airdrops:
The “Exit to the Community” airdrop rewards existing communities.
Typically, people who have been actively using the product are eligible for this airdrop. This rewards early adopters and encourages them to support the project.
Example: Individuals who purchased an ENS domain were eligible for the $ENS token airdrop. The goal of this drop was to give the community voting power for future decisions. And of course these tokens had real financial value.
The “Bringing Awareness” airdrop is used to introduce a project.
This airdrop is great for growing a community in a short period of time. People who have never heard of the project will be attracted by the tokens. A downside is that some people will immediately sell for a profit.
Example: OpenDAO airdropped their $SOS token for OpenSea users. These tokens were used to support emerging NFT communities. This airdrop resulted in 2.1k active members for OpenDAO.
Token airdrops can create awareness, reward loyal users, and decentralize token distribution.
The 2 main types are “exit to the community” and “bringing awareness”.
Using these, airdrops can be a great way to grow your project and supercharge your community.