The Golden Rain: Demystifying the Buzz + Potential Crypto Airdrops

PEAKDEFI
3 min readAug 31, 2023

What is an Airdrop?

An airdrop, in the context of cryptocurrencies, is when a blockchain project distributes a free amount of its tokens to the wallets of existing coin holders. It’s akin to a “bonus” for holding certain cryptocurrencies. Airdrops can occur for various reasons, such as marketing, increasing distribution, or rewarding loyal users.

How Do Airdrops Work?

  1. Eligibility: The most common form of airdrop requires you to hold a particular cryptocurrency at a specific time (known as a “snapshot”). For instance, if a new token wants to airdrop to Ethereum holders, they might take a snapshot of the Ethereum blockchain at a certain block number and distribute their tokens to all Ethereum addresses with a balance above a certain threshold.

2. Announcement: Before the airdrop, the project will announce the event, detailing the date of the snapshot, eligibility criteria, and distribution method.

3. Distribution: After the snapshot, tokens will be automatically distributed to the eligible wallets. In some cases, you might need to “claim” the tokens actively.

4. Exchanges: If you hold your coins on an exchange, it’s up to the exchange to support the airdrop. If they do, they will credit your account with the airdropped tokens. If they don’t, you won’t receive the airdrop.

How Can Investors Benefit?

1. Direct Profit: Receiving free tokens can result in direct profit, especially if the new token gains value. Some investors hold onto the airdropped tokens in anticipation of future price increases, while others might sell immediately.

2. Increased Interest: Airdrops can draw attention to a new project, potentially increasing the value of the parent token (the token you had to hold to be eligible for the airdrop).

3. Loyalty Rewards: Some projects use airdrops as a way to reward loyal users or long-term holders. These airdrops can serve as an incentive for users to continue holding or using a particular token.

Precautions:

1. Never Share Your Private Key: Some fake airdrops will ask for your private key under the guise of needing it to distribute tokens. Never give it out.

2. Watch for Scams: Unfortunately, the allure of “free tokens” can be used to scam individuals. Always verify the legitimacy of an airdrop announcement.

3. Wallet Compatibility: Ensure your wallet supports the airdropped token. For example, if you’re getting an ERC-20 token airdrop, a compatible Ethereum wallet is needed.

4. Tax Implications: Depending on your jurisdiction, receiving an airdrop might have tax implications. It’s a good idea to consult with a tax professional regarding any tokens you receive.

In conclusion, airdrops can be a beneficial way for investors to gain exposure to new projects and increase their holdings. However, as with all things in the crypto world, diligence and caution are essential.

Potential upcoming Airdrops:

The channel Dapp University on Youtube made an interesting video about airdrop research and shared some approaches:

  • Via the website https://airdrops.io/ you can find potential airdrops
  • By using the paid version of ChatGPT you can set up DefiLlama as a plugin and ask the following question:

Other potential airdrops might be: zkSync, Lens Protocol, Shardeum, Starknet, Sui, Layer Zero, Scroll, Arkham Intelligence, Meld Finance, Hyperliquid, Bebop, Odos, Slingshot, Argent X and Zapper.

Crypto airdrops have long been the digital realm’s best-kept secret, offering savvy investors unexpected bonuses in the form of free tokens. As the cryptocurrency ecosystem matures, airdrops are not the only way to unlock high returns. Platforms like our PEAKDEFI Launchpad are emerging as game-changers. By allowing investors early access to fresh projects, PEAKDEFI provides a unique opportunity to potentially achieve incredibly high yields.
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