Learn the art of the airdrop, an unsolicited marketing tactic in the blockchain that may be the answer to helping cryptocurrency and NFT projects skyrocket in popularity.
This automatically made me think of how Apple users can receive photos and other media assets via AirDrop, which notably requires you to be in proximity of the device you’re interacting with. So, do crypto airdrops work the very same way?
Not quite — but close.
Blockchain-based projects and companies often use crypto airdrops to release free tokens to their community members as part of a broader marketing plan to raise awareness about new offerings. The interesting aspect about crypto airdrops is that companies aren’t asking you to spend money to acquire what they are giving away.
“Crypto airdrop could be for two different things. One could be for the purpose of marketing that involves sending coins or tokens to a wallet address to create awareness about a new project,” Piril Akay, co-founder of Kairos, further explained to Boardroom. “The secondary purpose is for an existing project to have a governing mechanism. It typically always ties back to an existing project.”
Akay is a product designer and strategist by trade, but she’s been investing in and learning about cryptocurrency since 2017. At the end of 2020, she’s become passionate about NFTs, and she even has a couple of Bored Apes in her portfolio. Akay said she acquired her Bored Apes at a lower risk and cost since she was a part of the minting process when the collection came about in May 2021.
Akay broke down how crypto airdrops work, some benefits to them, and more.
How do crypto airdrops work?
Crypto airdrops can execute in several ways, but here are the most common scenarios you need to know:
- Bounty airdrop: When recipients engage in some sort of promotional activity–like sharing a social media post or signing up for a newsletter–to receive the digital asset
- Holder airdrop: When crypto projects take a snapshot their community member’s crypto wallets on a certain day and time, and let them claim an airdrop based on their ownership
- Standard airdrop: when crypto projects distributes digital assets to all the wallets associated in its community
For the ApeCoin airdrop, the Apecoin DAO conducted something similar to a holder airdrop. Instead of relying on the quantity of crypto assets their community had, the organization instead looked at the average floor prices of Bored Apes and Mutant Apes. It then attached the airdrops to select NFTs themselves.
When a new airdrop happens in the Bored Ape Yacht Club community, Akay said Bored Ape NFT holders usually get into a Twitter Spaces chat to discuss and understand what the new drop is and how they can maximize on it.
“With Bored Apes, there are so many airdrops within this community specifically because there is organic growth that happens with the community itself,” she said.
One unique aspect of the Bored Apes world is the narrative behind the collection that allows the creators to add new elements to its ongoing mythos as days go by. Akay said airdrops are vital in the community for this reason because they essentially require community members to participate in building BAYC’s cross-platform canon.
Take the mutant serum airdrop that BAYC released last fall, for example. This was a standard airdrop — each Bored Ape holder was sent one of three serums that allowed them to transform their Apes into Mutant Apes, creating entirely new NFTs. This was a huge development, in that serum holders had a choice to either keep or sell the serums, and in some cases, they didn’t know what their mutated NFTs would look like.
The creative cost-and-benefit approach to exclusivity helped a community conversation catch on and spread like non-fungible wildfire.
BAYC’s mutant serum airdrop also opened the dooBAYC’snew collectors interested in ownership since they also ran a sale for mutant apes.
Pros and cons of crypto airdrops
Airdrops are the most beneficial to the early adopters and dedicated community members in a crypto project. Since anyone could easily search smart contracts and find NFT holders, some people may have tons of unwanted digital assets sitting in their wallets, creating skepticism about the airdropping process.
“It’s one of those things where anyone could airdrop anything because everything is out in the public,” Akay explained.
One positive feature about airdrops is that crypto holders usually get to claim the assets themselves, which gives them time to do some research on the project and its legitimacy.
For crypto organizations, successful airdrops could mean a larger following for their projects. On the other hand, some crypto organizations may run airdrop giveaways in an attempt to make a quick buck.
Some other things to think about with airdrops are their security and taxability. Since the space is new, the crypto community is still working through where these lines will be drawn.
“One of the things I’m looking forward to is how more people are going to be able to participate with airdrops, DAOs, and being able to sign ownership,” Akay said. We’re at that point where it’s going to become popular with a lot of projects. It’s definitely exciting, but people should not try to claim every single airdrop. Be cautious and do your research…it’s scary [and] not everyone has the best intent out there.”