What Are Crypto Airdrops And How to Find the Next Major One?
Airdrops have become a very popular and possibly lucrative way for crypto users to build their portfolios and receive free tokens that could turn into very valuable.
However, finding the best and the most rewarding ones is not always as easy as many would think.
There are many airdrops that take place each week, and finding those which are worth it could be a daunting task, especially if you have no prior experience with decentralized finance (DeFi).
In this guide, we will go through what airdrops are, some examples of the best ones and how much money people got from them, as well as airdrop hunting strategies that you could start using immediately.
- What is a Crypto Airdrop?
- Why do Projects Decide to Airdrop their Tokens?
- Can You Make Money From Crypto Airdrops?
- The Most Successful Crypto Airdrop
- How to find the Best Crypto Airdrops?
- Are Crypto Airdrops Safe?
- Caution: Must-read Safety Tips Before Participating in Airdrops
- How to find the Best Crypto Airdrops?
What is a Crypto Airdrop?
A crypto airdrop is a term that refers to when a project ‘gifts’ its native tokens to a wallet address that has qualified based on a predetermined set of rules.
In essence, when a protocol hasn’t yet issued its own token and wants to distribute its supply in a way that’s designed to reward early adopters and participants in its ecosystem and community – that’s an airdrop.
The tricky part is that crypto airdrops are usually a surprise – no one outside of the team typically knows if and when the project will deliver a token nor what the predetermined qualification rules are, or when the “snapshot,” which will decide who will get rewarded, takes place.
However, since there have been quite a bit of crypto airdrops already, we have a pretty good clue of what these requirements usually are and what projects are likely to issue a token in the future, so stay tuned.
The main question that people ask is why would a project airdrop a token instead of just conducting an Initial Coin Offering or Initial Exchange Offering.
Well, crypto airdrops come with a number of benefits.
Why do Projects Decide to Airdrop their Tokens?
Easy to get the token into market circulation
Launching a token comes with a range of different challenges that the team has to consider, and it could easily be a double-edged blade that could make or break the entire project.
These would depend on the purpose and nature of the token itself, but one of the main worries is if people would invest and/or trade it. You can have the best protocol on your hands, but if the token is constantly nosediving and going nowhere, that’s likely to discourage future users.
Airdropping tokens to active users, on the other hand, means that the team is feeding the coins directly to the target users. Even if many of them dump them instantly, some will definitely keep them and use the product. That’s how a customer base is forged.
There aren’t many things in crypto that can create hype as strong as a good airdrop. The examples are plentiful. Take Arbitrum, for example. Crypto people were talking about the airdrop from the moment the network went live, and many users started performing various tasks, interacting with the Arbitrum dApp, with the sole purpose of qualifying for a future airdrop that may or may not happen.
Cultivates strong communities
The above also tend to create strong communities. People who suspect that an airdrop might be in the cards spend more time using the protocol, engaging with other users, even donating to project-related grants.
Can You Make Money From Crypto Airdrops?
Airdrop hunting has become a very lucrative endeavor, and many users are spending time performing various activities on protocols that haven’t issued their tokens. That said, doing it effectively and being able to make a considerable amount of it is not that easy and requires both time and knowledge of how to use various DeFi protocols.
It’s also worth noting that many of the platforms that you will be using might end up not issuing a token at all. This means that you might end up spending time and funds on fees without getting anything in return.
Airdrop hunting also carries the risk of making costly mistakes, especially if you’re working with larger amounts. However, based on most airdrops of major platforms so far, you probably won’t need a lot of funds to qualify for a considerable number of tokens.
The Most Successful Crypto Airdrop
There are hundreds of airdrops that took place within the past couple of years, but for the sake of this guide, we will take a look at perhaps the three largest ones that had the greatest impact.
Uniswap’s UNI Airdrop
Uniswap was probably the first major airdrop in the defi era that pioneered the field of distributing tokens by these means.
The Uniswap airdrop itself was done on September 1st, 2020. Anyone who used the platform before that date was eligible for it. The airdrop saw 60% of the total supply – or 600M UNI tokens – distributed to Uniswap community members.
Liquidity providers could claim 15% of UNI’s supply, 4.9% was distributed pro-rata to all LPs, but the average user – which accounted for most of the participants – was airdropped a total of 400 UNI tokens. A total of 12,000 addresses received this amount.
Back when it happened, UNI started trading at around $4, and a lot of people were able to sell at these prices, securing a quick $1,600 payment for having used Uniswap but once before the date of the snapshot. Of course, those who held UNI and sold close to the all-time high would have pocketed close to $18,000.
Optimism’s OP Airdrop
In April 2022, Optimism – the popular Ethereum layer-two scaling solution – launched its token through an airdrop on May 31st, 2022. A total of 231,000 addresses were eligible to claim 214 million OP tokens.
As you can see, by that time, airdrops had become quite popular, as evident by the whopping increase in eligible users. In any case, this distribution saw around 930 OP tokens on average distributed to a single address (note – one user can have more than one address). The token started trading at around $1.30, which meant that the qualified users got a minimum of around $1200.
OP peaked at $3.22, making the airdrop worth over $3k at ATH prices.
Optimism launched another airdrop where users received about 30 OP tokens on average. The team will continue distributing tokens this way until 19% of the supply is airdropped to eligible members.
Arbitrum’s ARB Airdrop
The highly-anticipated Arbitrum airdrop happened on March 23rd, 2023, and distributed around 13% of the total supply to users who had performed certain tasks ahead of a snapshot and to DAOs who helped build different decentralized applications on the network.
The minimum received amount was 1250 ARB, while the maximum was 10,250 per address. It would depend on the number of tasks that users had performed ahead of the snapshot.
That said, the token started trading at $1.2, netting everyone who received tokens a bare minimum of $1,500.
How to find the Best Crypto Airdrops?
Now that you know how much money legitimate and large airdrops ship on average, it’s perhaps time to learn how to find the next Arbitrum.
There are multiple websites that provide aggregated information on various protocols, and a lot of them are entirely free. DappRadar, DeFi Llama, and others of this kind are great starting points.
From there, just filter the lists by network and try going for projects that have a lot of value locked in them. This is typically a sign that the protocol is trusted by many people and decreases the odds of it being a scam. Now that you have that narrowed down, simply find protocols that have not yet released tokens and start using them.
The truth is that there’s no clear-cut way to do so other than just performing various activities on protocols that haven’t yet released a token.
Luckily, we have a good idea of what these activities could look like based on previous airdrops. These could include, but are not limited to:
- Conduct transactions over time, i.e. on different months
- Conduct more than a certain number of transactions.
- Interact with more than one, two, or three (etc.) smart contracts using the platform
- Conduct transactions with an aggregate value of more than $1,000 (and $2,000, $10,000, etc)
- Deposit funds to the protocol
- Provide liquidity
- Swap tokens
- Buy and sell NFTs
- Bridge funds into the protocol
The list can go on and on. The best way to go about it is to just pinpoint a protocol and try to use it as much as you can as you would if you were not airdrop hunting. Also, take part in the project’s community. There, for sure, you will find the best ways to interact with the protocol. Think about it as if the time comes and the project decides to airdrop its native token, it would like to reward its most active users.
In late 2023 and the beginning of 2024, Solana’s ecosystem saw a number of high-value airdrops, such as Jupiter’s JUP token. We have a dedicated guide on Solana airdrops:
Are Crypto Airdrops Safe?
This is a very important consideration. Not all airdrops are safe. There are many profitable airdrops, but there are also many scams – just as in all things crypto. You have to be particularly careful.
Many scammers will try to exploit the excitement that airdrops create and lure people into connecting their wallets to malicious dapps and drain their funds.
When it comes to hunting for airdrops, you should apply the same scrutiny as with everything else.
We have a guide on how to avoid DeFi scams – make sure to check it out, as it fully applies to airdrops as well. You can also check the FAQ section below for quick tips on staying safe.
Caution: Must-read Safety Tips Before Participating in Airdrops
As we mentioned above, it’s very important to make sure that the projects that you are interacting with are legitimate and not scams.
You should also consider the fact that airdrop hunting requires a certain investment. While you can forgo investing and providing liquidity to eliminate the risks of impermanent loss and others of the kind, you will still have to pay fees. On certain networks (like Ethereum), this could quickly add up to hundreds of dollars, especially if you are doing this extensively or full-time.
Also, it’s advisable to isolate a new ERC20 address for every airdrop you participate in. Aside from privacy, in case you have been scammed, and your wallet gets drained – you can minimize your loss.
Beware of phishing. Scammers know that users are seeking and searching for hot airdrops, hence, they will try to create identical websites that interacting with them will often end in draining your wallet. Always make sure you’re interacting only with the protocol’s official website.
Hunting for airdrops can be a very profitable endeavor and one that doesn’t require a considerable investment to begin.
It also helps to follow notable cryptocurrency community members. For example, both the Optimism and the Arbitrum airdrops were well-anticipated ahead of time, and the entire community was speculating about them long before the dates of their respective snapshots.
At the same time, it’s also important to keep in mind that it’s not a get-rich-quick scheme and requires quite a bit of time, knowledge, and effort to do it effectively.