An airdrop is an unsolicited free giveaway of tokens to all users of a particular blockchain who meet certain conditions. Sometimes, to receive an airdrop, users have to share some kind of advertisement on social media, endorsing or drawing attention to the project. In other cases, users don't have to do anything other than hold a certain amount of currency in their wallets, have an amount of currency on stake, or own a particular NFT.
Airdropping is a very common marketing strategy, used by DeFi projects and DeFi gaming projects with the goal of gaining popularity.
For example, in 2017, the company Omise gave away 5% of their OmiseGO tokens to ETH holders.
- It incentivizes new players to join a DeFi project
- It eliminates the risk of investing
- They can be used for dusting attacks
Airdrops are a very good idea to attract users to a new DeFi project. But it is important for investors to pay attention to many other factors before investing in a new project, because an airdrop alone is not reason enough to do so.
It is also very important to verify the token name, blockchain and amount of any airdrop received to a wallet before cashing out, to make sure it is the expected amount, and not dust from a dusting attack.
Airdrops are very useful for users, because they eliminate the risk of investing in a new DeFi project, which is why it is often used as a marketing strategy by developers. In a market full of scams and failed projects, airdrops are one of the few ways of getting people to try a new DeFi project, not only for making profits by staking or speculation, but also by using the currency as a payment method and a store of value.
The downside is that airdrops can be used to execute dusting attacks, where very small amounts of currency (dust) are sent to every wallet in a blockchain, with the goal of uncovering the identity of wallet owners, then using this information to perform phishing scams or block payments. Fortunately, if the owner doesn't try to cash out the tokens, the attack cannot be executed.