A crypto airdrop is usually a marketing tactic that uses the free distribution of new cryptocurrency tokens to drive awareness and build communities quickly, as well as help to put an early value to a token as recipients may begin to trade their airdropped tokens. Airdrops are therefore commonly used by startups looking to bootstrap their crypto projects. News of an upcoming airdrop is usually posted on a crypto project’s website or Medium page or third-party airdrop tracker, and shared across social media platforms where many cryptocurrency enthusiasts can see.
An airdrop involves small amounts of newly-minted cryptocurrencies and targets members of a select blockchain platform. For example, cryptocurrency startups may airdrop coins to wallet holders of the NEO, Ethereum or the Bitcoin network.
In some cases, a recipient may be required to hold particular tokens or maintain a minimum balance in order to be eligible for an airdrop. For instance, TRX holders will continue to receive BTT airdrops consistently until February 2025.
In other cases, users may need to perform small tasks such as posting about a project on social media. Note that crypto airdrops are different from initial coin offerings (ICO) — the latter are intended to solicit investments from individuals, which classifies ICOs in the U.S. as securities offerings — while airdrops are broadly used to raise awareness. Oftentimes, an airdrop may be followed by an ICO or other forms of token fundraising.
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