Airdrops are a fairly harmless marketing tool geared as community incentives for the mutual benefit of new ventures and their early backers.
Airdrops and free distribution of cryptocurrency is usually a marketing tactic that uses free distribution to quickly increase awareness and build communities, as well as help establish an early value for digital currency, as recipients may start trading freely distributed cryptocurrencies. So airdrops are commonly used by startups looking to boot their crypto projects.
Airdrop news is usually posted on the crypto project’s website or websites that track free distributions, and is usually shared across social media platforms where many cryptocurrency enthusiasts can see it. The airdrop process includes small amounts of new cryptocurrencies and targets members of a specific blockchain platform.
In some cases, the recipient may be required to hold certain cryptocurrencies or maintain a minimum balance to be eligible for a portion of the Airdrop.
In other cases, users may need to perform small tasks such as posting about a project on social media.
The benefits of airdrops
Spreading awareness is the main reason why crypto and blockchain startups are airdropping.
A flood of startups emerged during the gold rush, this led to an oversaturation of the market and exhaustion of investors. This led to searching for a different way to raise awareness about the project. It helped highlight the popularity of airdrops and many cryptocurrency supporters promoted projects in order to get airdrops and pump their wallets.
Airdrop as a reward for users
The sad truth is that many investors in the cryptocurrency ecosystem only benefit from the highest return on investment (ROI) and do not care about the long-term sustainability of the project. So, they jump from project to project, dumping their heavy bags after pumping and making huge profits from small investors without providing any actual value to the protocol.
In fact, this kind of behavior can damage projects, especially small ones.
To counter this, some startups conduct free cryptocurrency airdrops in order to reward loyal users who use their platforms or keep a certain amount of cryptocurrency in their wallets for certain periods.
Distribution of digital currencies in order to achieve decentralization
The problem is that large amounts of coins in the hands of a few people cause centralization, which is currently one of Dogecoin’s major drawbacks. In such cases, projects can opt for an airdrop procedure to balance the distribution of cryptocurrencies.
Airdrop operations to attract investments
A smart way to increase the money raised without spending a lot on marketing is through airdrops, as this strategy is all about creating awareness. When a project is launched and an airdrop is made, the hype helps push the price of the coin up as most recipients will run projects that give them free money. As an added bonus, airdrops allow projects to collect data from the crypto community because some require recipients to fill out a form providing personal details such as email or social media and their opinions about the crypto projects. With this information, the project team can conduct targeted marketing campaigns.
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