Return of the Airdrop

Airdrops used to be quite the thing in crypto. Chances are, if you had any sort of portfolio you will have experienced at least one and got your hands on some free coins.

But what is an Airdrop?

Simply put, an Airdrop is when a coin is distributed for free to users. The criteria for receiving such an Airdrop can be as simple as registering via a telegram chat group or even just holding a certain coin at a certain time.

Even HIVE was an Airdrop!

All holders of STEEM (barring a few exceptions) were airdropped an equivalent amount of HIVE relative to their STEEM Holdings.

Free coins. Who doesn't love some of that?

Why do Airdrops?

The whole premise behind an Airdrop is usually to gain attention. A company may claim many other things. Ostensibly, that they want to reward their users but it really comes down to publicity and distribution.

Publicity, explains itself. When you are giving out free money it tends to draw attention and users clamouring for their slice of the pie.

Distribution is just as important. If people don't have your coin then there will be few transactions on your network. There will be little to suggest it is popular or taking off. It is as important to get your coin into as many hands as possible.

But won't they just insta-sell?

Ah, yes...

The downside of Airdrops

People love free money. That is a fact. And an Airdrop is quite literally that - free money.

However, it is not quite money if it is just sitting there locked up on an exchange or in your wallet. So a large percentage of recipients of an Airdrop sell it almost right away.

This can be damaging for the price but in the end it is considered a necessary evil and perhaps one of the reasons that the most common criteria for an Airdrop is that it is distributed to the hodlers of a related coin. If they are hodling already, there is less chance of them selling immediately. Although many do.

During peak ICO season, it seemed that there was an Airdrop every other week and in the bear market that followed the frequency of Airdrops decreased with the lower levels of development in the crypto space.

But all that seems to be changing. Airdrops are coming back, XRP took the snapshot for the SPARK Airdrop a couple of days ago and XEM will be taking a snapshot of their hodlers on January the 24th for the SYMBOL Airdrop.

Hang on to your hats as I think these are more signs that finally, the bull is coming.

Posted Using LeoFinance ^Beta