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

Crypto Briefing shares an inventory of ideas and methods for airdrop seekers.

Understanding Airdrops

Over the previous few years, airdrops or free token giveaways have grow to be a standard incidence throughout the cryptocurrency ecosystem. 

Put merely, an airdrop entails distributing crypto tokens for free 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 price 1000’s of {dollars} to particular person neighborhood members, highlighting the profitable alternative that comes from being early to initiatives.

Airdrops additionally work as an efficient advertising and marketing software for protocols to pull 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 1000’s of {dollars} price of tokens with a low upfront funding. The phenomenon has brought on plenty of noise and pleasure amongst crypto customers wanting to grow to be certified to declare profitable giveaways. 

This text focuses on among the finest methods to grow to be eligible for airdrops. 

Scouting for Potential Airdrops

A technique to enhance the chances of receiving free tokens is to scout for potential airdrops. Customers can start by discovering notable initiatives that do not need a token however might create sooner or later. Usually, initiatives depart hints that counsel that they might drop a token sooner or later. Tasks often allocate 5 to 10% of their token provide to early customers throughout token technology occasions. 

Devoted crypto airdrop web sites, social media teams, and boards additionally present invaluable details about rumored airdrops. Maybe essentially the most helpful useful resource is DeFi Airdrops, a Twitter account that focuses on highlighting doubtless airdrops upfront. DeFi Llama’s airdrop page additionally highlights tokenless protocols that will manage 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 enormous cross-chain bridges like Hop Protocol.

Assist New Crypto Tasks

As well as to scouting for initiatives, one efficient technique to enhance 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 might lead to an airdrop sooner or later. 

Whereas lots of the largest airdrops to date have occurred on Ethereum, getting immersed in different ecosystems and experimenting with the know-how as a lot as potential ought to solely enhance the possibilities of a future payout.

Become Energetic to Meet Complicated Eligibility Standards  

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

The airdrop area has developed dramatically over the previous few years. Whereas 1000’s of customers obtained profitable airdrops from initiatives like Uniswap, Ethereum Title Service, and dYdX after making only one or two Ethereum transactions, airdrop eligibility standards has grow to be stricter throughout the board (that’s partly thanks to instances 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 mission). 

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

Due to the strict eligibility standards some protocols require, customers might decide for changing into extra energetic with initiatives with each pockets they use to enhance their possibilities of receiving a token payout. 

Go to Ethereum for Excessive-Worth Airdrops

Of all of the Layer 1 blockchains with energetic DeFi and NFT ecosystems, Ethereum has traditionally been the most effective community for essentially the most profitable airdrops by a long way. Uniswap, 1inch, dYdX, Ethereum Title Service, Paraswap, and different initiatives all distributed a minimum of $1,000 price of tokens per person after they airdropped their tokens on the community, and in some instances the rewards had been a lot greater (those that held onto their tokens had been typically rewarded with greater returns too). To this point, such profitable airdrops have been harder to come 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 apart from Ethereum typically will get diluted due to the sheer quantity of person wallets interacting on these networks. Plus, many initiatives on blockchains apart from Ethereum decide to preserve their tokens for liquidity mining and different incentivization packages. 

Groups on Layer 1 networks with reasonably priced transaction charges typically decide for liquidity mining packages to keep away from airdrop farming situations, the place customers recreation giveaways by interacting with a protocol utilizing tens and even tons of of Web3 wallets. In consequence, utilizing Ethereum-based initiatives is usually extra doubtless to lead to an airdrop. 

A working example for that is LooksRare, a brand new NFT market that airdropped tokens to OpenSea customers final month. For the airdrop, the LooksRare workforce solely included OpenSea addresses that had traded a minimum of 3 ETH on OpenSea’s Ethereum utility. OpenSea customers on Polygon, in the meantime, didn’t make the reduce. 

To make use of Ethereum and grow to be eligible for airdrops on the community, customers want to purchase ETH. It’s necessary to concentrate on the excessive gasoline prices on the community—making transactions when there’s much less site 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 might launch governance tokens sooner or later. Bored Ape Yacht Membership, for instance, has already confirmed its plans to launch a token. 

Holding the appropriate NFT also can 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 preserve their communities engaged.

Changing into energetic within the NFT area and figuring out initiatives with robust communities is among the finest methods to qualify for airdrops, each within the type of governance tokens and new NFTs.

Staking Tokens 

For customers wanting to qualify for airdrops simply from holding and staking tokens, the Cosmos ecosystem could also be among the finest locations to begin. On Cosmos, many initiatives distribute tokens to ATOM stakers.

Cosmos is a Layer 0 blockchain interoperability protocol that connects varied Layer 1 chains by means 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 obtained airdrops from initiatives constructing on the community over the previous few months.

Apart from ATOM, many crypto customers have obtained airdrops from staking the tokens for different Cosmos-based networks like Terra (LUNA) and Osmosis (OSMO). Whereas Cosmos stakedrops are not often as profitable as these on Ethereum, the eligibility standards is less complicated. 

Ultimate Suggestions

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

Some protocols might use completely different distribution strategies apart from airdrops to launch tokens. Quite than free giveaways, crypto startups typically increase capital by means of non-public token gross sales and record the token straight on the change. Many go along with liquidity mining campaigns to distribute their property as an incentive for supplying property in liquidity swimming pools. 

It’s additionally necessary to observe that there are many risks related to airdrops. Hackers might use phishing scams to lure customers to join their pockets to a pretend airdrop web site and trick them into agreeing to let a wise contract spend their property. It is a popular method for draining property from wallets. 

Moreover, some airdropped tokens have little to no worth on buying and selling markets, so it might not even be price claiming them after factoring transaction prices. It’s all the time price calculating the worth of a token airdrop to guarantee it’s greater than the charge to declare it. 

Looking for each rumored airdrop is probably going to lead to disappointment as not each rumor will materialize right into a token giveaway. Furthermore, tokens given away with no qualifying standards not often accrue important worth. 

Looking for token airdrops takes effort. Nonetheless, for those that are keen to put 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 offered above is meant as funding advise.