If you’ve started to research how to earn cryptocurrency, then you’ve probably heard of airdrops a new pioneering concept of giving away free tokens to enthusiasts.

Those willing to part with their contact details in exchange for a few of the companies latest cryptocurrency or utility token are added to a list. Once the token is released these early sign-ups will receive their promised share of tokens sent to their wallet.

We’ve all been told that there is no such thing as a free lunch, and we should always be a sceptic of words that sound too good to be true. Why would a company want to give away its digital assets seemingly for free?

So what’s the catch? If you’ve ever wondered why cryptocurrency projects partake in airdrops, then let me explain a crypto airdrops importance in setting up a project for success.

Marketing

Create awareness

Looking at the size of the cryptocurrency market, and the frequency of new projects entering the space, a new token can go completely unnoticed if an effective marketing campaign isn’t in play. Airdrops are one of the easiest ways to create a hype and buzz which play an essential role in the cryptocurrency ecosystem.

Collecting a lead database

While initial awareness is essential it can quickly fade with time, especially in the crypto space where new projects are fighting for the spotlight every day. If a blockchain project is going to survive, it needs to be able to communicate affordably and effectively to its, which is why leads are so valuable.

Airdrops can be used by blockchain-based enterprises to generate valuable lead databases for their organizations. In exchange for free cryptocurrency tokens, users will be asked to complete online forms that contain useful user information which can be used to develop targeted marketing strategies.

These databases will be used down the line to reach out to investors perhaps during the ICO/IEO/STO phase or when a project gets listed on an exchange and even other updates.

Reward or referral programs

Airdrops often allow for sign-ups to receive bonus tokens for referring friends and is used as a way of getting your audience to sign up their friends or promote your token via their sites or social networks to benefit from the referral program.  Airdrop referrals help the amplification of your message and assisting the reach of the project over time.

 

Distribution

 

Creating initial need/wallet creation

For a token to be worth, a value, it requires users to buy and sell, if only a few users are buying and selling it doesn’t create a good demand and the price will soon drop. By using an Airdrop, a cryptocurrency can multiply the number of wallets holding their token and encourage active investors to keep, buy and sell.

Creating this initial need for the token to be traded can be seen by the number of wallets available on the network.

Out of circulation

Many airdrop holders will sign up to claim their tokens but will forget about it or not bother to ever move it out of their wallet or even lose access to that specific wallet. Airdrops allow token projects the ability to make their currency even more scarce because of these situations, and with less currency in circulation, the demand will increase and naturally with that sees an increase in the trading price.

Additional Purchases

While some airdrops can be pretty generous, they’re often an issue when it comes to trading them on the exchange once they are listed. Many airdrop holders will need to purchase a few extra tokens and up their stake, if they plan on selling it and making their efforts worthwhile.

Instead of just selling your airdrop and making a small amount, many will purchase additional tokens for a lower price before listing to add to their airdrop stake and make selling a worthwhile process.

 

How to become an airdrop hunter

 

Airdrops are a great low-risk way to familiarize yourself with cryptocurrency and the various technologies and communities supporting them.

New airdrops are launched every day around the world, and if you want to stay in the loop and not miss out on potential free returns, you’ll need to create wallets with popular airdrop chains like Ethereum, NEO, Stellar and EOS.

Once you have your wallets set up, you can use our site AirdropsMob and check in regularly for new airdrop opportunities.

About the author

 

Che is a Cape Town based tech enthusiast and digital marketer and blogger by trade with a keen eye for cryptocurrency and emerging tech trends. He is also the co-founder of nichemarket, A South African Business Directory  & online community designed to promote local entrepreneurs, SME’s and startups.