Beginner’s Guide: How to Become Eligible for Token Airdrops

Crypto Briefing shares a listing of suggestions and methods for airdrop seekers.

Understanding Airdrops

Over the previous few years, airdrops or free token giveaways have turn into a standard incidence throughout the cryptocurrency ecosystem. 

Put merely, an airdrop entails distributing crypto tokens without cost to early adopters of a decentralized utility, blockchain service, or different cryptocurrency person. Airdropped tokens are usually used for protocol governance and for utilities inside an utility. 

Many crypto and DeFi initiatives have allotted governance tokens value hundreds of {dollars} to particular person group members, highlighting the profitable alternative that comes from being early to initiatives.

Airdrops additionally work as an efficient advertising and marketing device for protocols to tug in new customers. The anticipation of free airdrops has prompted a rise in exercise on protocols that don’t have their very own tokens. 

For a lot of crypto fanatics, airdrops are a approach to obtain hundreds of {dollars} value of tokens with a low upfront funding. The phenomenon has precipitated a number of noise and pleasure amongst crypto customers seeking to turn into certified to assert profitable giveaways. 

This text focuses on among the greatest methods to turn into eligible for airdrops. 

Scouting for Potential Airdrops

One approach to enhance the percentages of receiving free tokens is to scout for potential airdrops. Customers can start by discovering notable initiatives that would not have a token however could create sooner or later. Usually, initiatives depart hints that recommend that they could drop a token sooner or later. Initiatives regularly allocate 5 to 10% of their token provide to early customers throughout token era occasions. 

Devoted crypto airdrop web sites, social media teams, and boards additionally present worthwhile details about rumored airdrops. Maybe probably the most helpful useful resource is DeFi Airdrops, a Twitter account that focuses on highlighting seemingly airdrops upfront. DeFi Llama’s airdrop web page additionally highlights tokenless protocols that will set up airdrops.

A number of the key initiatives rumored to be getting ready for airdrops in 2022 embrace NFT marketplaces like OpenSea and Basis, the Ethereum Layer 2 initiatives Arbitrum, Optimism, and StarkWare, DeFi protocols like Set Protocol, Opyn, and Shell Protocol, and huge cross-chain bridges like Hop Protocol.

Help New Crypto Initiatives

Along with scouting for initiatives, one efficient technique to extend the possibilities of receiving an airdrop reward is to actively use initiatives on blockchains like Ethereum, Solana, Fantom, Avalanche, and Cosmos. 

Customers can take into account experimenting with tokenless functions throughout niches like DeFi, NFTs, and GameFi. For instance, if a promising lending protocol emerges on Ethereum, including tokens to its liquidity swimming pools could result in an airdrop sooner or later. 

Whereas lots of the largest airdrops up to now have occurred on Ethereum, getting immersed in different ecosystems and experimenting with the expertise as a lot as doable ought to solely enhance the possibilities of a future payout.

Change into Lively to Meet Advanced Eligibility Standards  

Whereas being an early person of recent protocols is step one towards receiving potential airdrops, making just one or two transactions is probably not sufficient to qualify.

The airdrop house has developed dramatically over the previous few years. Whereas hundreds of customers acquired profitable airdrops from initiatives like Uniswap, Ethereum Title Service, and dYdX after making only one or two Ethereum transactions, airdrop eligibility standards has turn into stricter throughout the board (that’s partly due to circumstances like final 12 months’s Divergence Ventures saga, by which the VC fund farmed $2.5 million in tokens from Ribbon Finance after investing within the venture). 

In latest months, many initiatives have used strict eligibility necessities. ParaSwap’s November 2021 airdrop was restricted to customers who had made at the very least 5 swaps, and largely went to customers who had used the applying on a couple of blockchain. Final week, CowSwap, one other decentralized alternate aggregator on Ethereum, introduced that its airdrop can be for merchants who had transacted a minimal quantity of $1,000 throughout at the very least three trades.

Because of the strict eligibility standards some protocols require, customers could go for changing into extra lively with initiatives with each pockets they use to extend their possibilities of receiving a token payout. 

Go to Ethereum for Excessive-Worth Airdrops

Of all of the Layer 1 blockchains with lively DeFi and NFT ecosystems, Ethereum has traditionally been one of the best community for probably the most profitable airdrops by a long way. Uniswap, 1inch, dYdX, Ethereum Title Service, Paraswap, and different initiatives all distributed at the very least $1,000 value of tokens per person once they airdropped their tokens on the community, and in some circumstances the rewards had been a lot larger (those that held onto their tokens had been usually rewarded with larger returns too). Thus far, such profitable airdrops have been tougher to return by on different Layer 1 blockchains like Solana, Avalanche, Fantom, and Polygon, the place transaction charges are significantly lower than Ethereum.

The worth of airdrops on networks aside from Ethereum usually will get diluted because of the sheer quantity of person wallets interacting on these networks. Plus, many initiatives on blockchains aside from Ethereum choose to maintain their tokens for liquidity mining and different incentivization packages. 

Groups on Layer 1 networks with reasonably priced transaction charges usually go for liquidity mining packages to keep away from airdrop farming eventualities, the place customers recreation giveaways by interacting with a protocol utilizing tens and even lots of of Web3 wallets. In consequence, utilizing Ethereum-based initiatives is commonly extra prone to result in an airdrop. 

A living proof for that is LooksRare, a brand new NFT market that airdropped tokens to OpenSea customers final month. For the airdrop, the LooksRare crew solely included OpenSea addresses that had traded at the very least 3 ETH on OpenSea’s Ethereum utility. OpenSea customers on Polygon, in the meantime, didn’t make the lower. 

To make use of Ethereum and turn into eligible for airdrops on the community, customers want to amass ETH. It’s essential to concentrate on the excessive fuel prices on the community—making transactions when there’s much less visitors can scale back prices.

Get to Grips With NFTs

Minting, shopping for, and holding NFTs is one other prime technique to get in on airdrops. Many crypto fanatics have speculated that NFT collections could launch governance tokens sooner or later. Bored Ape Yacht Membership, for instance, has already confirmed its plans to launch a token. 

Holding the precise NFT may entitle holders to new NFTs. Bored Ape Yacht Membership airdropped Bored Ape Kennel Membership NFTs and Mutant Serums to Bored Ape holders, whereas different collections like Cool Cats and Damien Hirst’s The Forex have additionally given away new NFTs to holders to maintain their communities engaged.

Turning into lively within the NFT house and figuring out initiatives with robust communities is likely one of the greatest methods to qualify for airdrops, each within the type of governance tokens and new NFTs.

Staking Tokens 

For customers seeking to qualify for airdrops simply from holding and staking tokens, the Cosmos ecosystem could also be probably the greatest locations to start out. On Cosmos, many initiatives distribute tokens to ATOM stakers.

Cosmos is a Layer 0 blockchain interoperability protocol that connects varied Layer 1 chains by way of a central gateway. One function that makes Cosmos distinct from different blockchains is the idea of “stakedrops,” which refers to airdrops given for staking tokens on the community.

Many ATOM stakers have acquired airdrops from initiatives constructing on the community over the previous few months.

Apart from ATOM, many crypto customers have acquired airdrops from staking the tokens for different Cosmos-based networks like Terra (LUNA) and Osmosis (OSMO). Whereas Cosmos stakedrops are hardly ever as profitable as these on Ethereum, the eligibility standards is less complicated. 

Remaining Ideas

Each token airdrop differs in its eligibility standards, which brings a level of uncertainty to the equation. Even lively customers are sometimes excluded from the ultimate record of eligible addresses. Rumored airdrops are additionally usually extremely speculative. 

Some protocols could use totally different distribution strategies aside from airdrops to launch tokens. Fairly than free giveaways, crypto startups usually elevate capital by way of personal token gross sales and record the token immediately on the alternate. Many go together with liquidity mining campaigns to distribute their belongings as an incentive for supplying belongings in liquidity swimming pools. 

It’s additionally essential to notice that there are various dangers related to airdrops. Hackers could use phishing scams to lure customers to attach their pockets to a faux airdrop web site and trick them into agreeing to let a sensible contract spend their belongings. It is a fashionable technique for draining belongings from wallets. 

Moreover, some airdropped tokens have little to no worth on buying and selling markets, so it could not even be value claiming them after factoring transaction prices. It’s at all times value calculating the worth of a token airdrop to make sure it’s larger than the payment to assert it. 

Looking for each rumored airdrop is prone to result in disappointment as not each rumor will materialize right into a token giveaway. Furthermore, tokens given away with no qualifying standards hardly ever accrue vital worth. 

Looking for token airdrops takes effort. Nonetheless, for many who are keen to place within the work and experiment throughout the crypto ecosystem, the rewards might be substantial.

Disclosure: On the time of writing, the creator of this piece owns ETH and SOL. Not one of the info introduced above is meant as funding advise.