Cryptocurrency airdrops are essentially free coins which can be dropped directly into your wallet. It's literally free money handed over to you! Get far more facts about free coin airdrop
While that does sound pretty fantastical, there is certainly an actual method behind this madness. Airdrops are calculated marketing maneuvers which truly saves companies a lot of money inside the extended run.
In this guide, we are going to look into what Airdrops are and how they assist companies with their marketing and distribution tactics.
What does “Airdrop” mean?
In its literal definition and historical use, an airdrop is a tactic by which crates of food and necessary supplies are dropped through airplane to people in will need. So, after you see old war footages of soldiers dropping crates of food/supplies and so on., that's generally an airdrop.
In the context of cryptocurrencies, having said that, this takes a whole new meaning.
In the event you are involved inside the crypto space, then you definitely must have come across this term prior to. The objective of this article should be to clear up all of the confusion which you may have surrounding this term. Also, hopefully, you'll discover how to meticulously dissect airdrops to create oneself a quite nifty profit from them!
Airdrops are basically a method by which a company distributes its tokens for the wallets of specific customers, entirely free of charge. So, probably the most apparent question that you're considering correct now is, why will companies just give their tokens away?
What Are Airdrops? And Why Companies Do It
You will discover actually many factors why companies could choose to conduct airdrops:
Generating Awareness
Understanding the users
Raising Funds
Rewarding or Inspiring Loyalty
Wider Distribution of Tokens
Tough Forks
#1 Creating Awareness
One from the most important roles of airdrops is to produce awareness. Although ICOs have raised more than $7 billion in 2018, the truth remains that a significant chunk of those funds was raised by a handful of projects. Because of the sheer number of projects around, many of the promising ICOs don’t even get the interest they deserve.
So, in place of potential customers painfully going through ICOs, hunting down good projects and investing in them, what if these projects gave you several of their tokens? Properly, you'll automatically get a stake in that system suitable? The moment you do that, should you are an knowledgeable investor, you might would like to understand much more about the project.
That in itself is making a lot of awareness inside the project.
#2 Understanding the Customers
To be able to take part in specific airdrops, you may need to fill up a kind.
So, what is the objective of filling a form like this?
By filling them up, the company will obtain more information about you, a potential user that will enable them make much more focused marketing solutions towards their ideal audience.
#3 Raising Funds
EOS airdrops have truly turned out to be a terrific fundraising method. So, how will that work? Let’s verify it out.
Suppose we are making a around the EOS blockchain and this DApp uses ASD tokens. We have issued 100 million ASD tokens and right after the launch of your project, every single ASD token is going to be valued at $0.10.
So, the total market place cap of the tokens is 100 million * 0.10 = $10 million.
As soon as you launch, you determine to allocate 20 million of these tokens for EOS drops. In the event you do the math, then that is 20 million * 0.1 = $2 million that you are allocating just for free giveaways. So, your general capital goes down from $10 million to (10-2) $8 million.
But, as your airdrop campaign continues, and social media gets flooded with news about your token and you get more eyes in your project. Supplied you may have a superb model, you can have more people posting about you and studying up on what you have got to offer you. This may raise the perceived worth of the tokens.
Even when the worth of each ASD token rises by $0.04, the general worth of one's tokens will go up to (0.04 * 80) = $11.2 million.
So, by providing away 20% of the tokens, you've raised (11.2 -10) = $1.2 million without the need of even promoting a single token! That is how fundraising in airdrops performs.
#4 Rewarding or Inspiring Loyalty
Loyalty amongst crypto users can be a really uncommon thing. The average user desires to make as much money as possible and the way they do which is by continually running behind the “next large token” leaving the newcomers behind. Some AirDrops are constructed in such a way that the much more tokens you hold, the much more you acquire in subsequent AirDrops. So, if a user is actually loyal to a token and keeps a substantial amount of it in their wallet, they will be rewarded with far more tokens by the company.
In the same time, AirDrops can inspire loyalty amongst users too considering that they are now truly incentivized to get and hold tokens.
#5 Wider Distribution of Tokens
One in the worst issues that could take place to an ICO can be a hostile takeover by whales. So, what specifically are whales? A whale is really a seriously wealthy investor who buys plenty of tokens in an ICO and does not let any one else get their slice of pie.
