Like a brand that launches a new product and distributes free samples to attract customers, crypto or blockchain-based start-ups have adopted a practice of distributing free Fungible Tokens or Non-Fungible Tokens (NFTs) of their projects in a bid to spread awareness and increase adoption. This promotional strategy is called an Airdrop. An airdrop is synonymous with a freebie in web3.
While airdrops do not require a user to pay monetary compensation, making them essentially “free”, they may require a specific user behaviour or action. For instance, an upcoming crypto exchange, XYZ, announces that it will distribute free tokens, $XYZ, of its projects to early users who sign-up on the exchange, share their experience with the application on social media or report any bugs.
Some projects require users to own a wallet of a specific company or create a wallet on a specific chain. However, to receive an airdrop, users must create a cryptocurrency wallet to store the fungible or non-fungible tokens. It is essential to clearly understand all the requirements enlisted by the project to be eligible for the airdrop. While using airdrops as a promotional strategy has become a ubiquitous practice, users must beware of scams around airdrops of malicious tokens.