Airdrops: What are They and What are The Risks?

John Medley
  • 6 Jul 2018
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  • 416 views
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  • In #ICO

Most of you probably already know about airdrops, and there is a good chance that you have already participated in one. But for those who are not sure what they are, here is a little introduction.

Airdrops are 'free' tokens/coins and to claim them you will need to give some information away typically and email address or wallet address. Most holders then wait for the tokens to be listed on an exchange in order to trade for another crypto. Ethereum, Stellar and NEO are currently the most popular platforms for airdrops.

A recent example of profitable airdrop is Ontology (ONT), which is built on NEO. In return for subscribing to a newsletter, users were dropped with 1,000 ONT tokens, now worth around $5,000.

Airdrops are a great way for developers to distribute their tokens widely and in return they usually ask for email addresses or wallet addresses. They are used to create awareness of a project and to gain a larger following on social media. As we all know that there is no valuable cryptocurrency without large and healthy community. Let see what types of airdrops are out there:

Fast and Bounty Airdrops

Fast airdrops are where users are required to join Telegram groups, follow on Twitter or like Facebook pages. They are the most common airdrops and the value of these tokens is usually between $1 and $10, however, the price of the tokens typically fluctuates if the token hits exchanges.

Bounty airdrops are a bit harder, but the number of the tokens that can be claimed is significant higher. Usually users are required to promote the project on the various forums, write blogs or post videos about the project. In most cases users are dropped tokens in proportion of the work they have done.

Holder and Fork Airdrops

This is where you will need to be holding a specific cryptocurrency in your wallet and the new token will be available in your wallet after the ‘snapshot’ date.  Forked airdrops are a bit different, when a cryptocurrency forks, holders of the original crypto are dropped the forked coins in the same ratio of the original cryptos they held at the time of the fork.

What are the Risks?

There are risks to airdrops, they can steal your identity, gather personal data and pinpoint you as the future target. Sometimes false airdrops are promoted to gain a user base for a totally different project. Here are some easy tips to make sure you don’t fall victim to malicious airdrops:

  1. Never pay to participate in an airdrop
  2. Never share your private key
  3. Protect your identity and data
  4. Avoid KYC airdrops when possible

In most cases your will need an email address. It is strongly advised to create a new email address that you will use only for airdrops.

Lots of projects requires to create an account for their platform, always use a different password. It is best to create a new wallet address so you don’t reveal how much you are holding.

Numerous ICOs and Airdrops have a KYC (know your customer) policy due to legislation. If the project is dubious (poorly written whitepapers, bad website, no real use case, no development team) it is best to pass.

Where to find airdrops?

There are a lots of quality websites, Twitter accounts or Telegram announcements channels out there. Airdropmob allows you to search and sort airdrops as well as track which airdrops you have participated in.

Airdrops can be great for participants as well as the organisers but as with most aspects of the crypto space there are scams so stay safe and protect yourself!