What is Airdrop
An airdrop is a process in which a cryptocurrency project distributes a specific amount of its tokens for free to a large number of users. This approach is a common marketing strategy in the crypto industry, and there are two primary types of airdrops: rewarding airdrops and promotional airdrops.
Rewarding airdrops are the more prevalent of the two and serve to reward loyal supporters, providing them with incentives to continue engaging with the project. Recipients of rewarding airdrops are typically existing users of the project.
In contrast, promotional airdrops aim to raise awareness, encourage adoption, and expand the project's user base. Recipients of promotional airdrops are usually individuals who have yet to interact with the project.
For instance, the DeFi protocol, 1inch, conducted two rounds of airdrops between late 2020 and early 2021. The first round functioned as a rewarding airdrop, while the second round served as a promotional airdrop.
During the first round, 1inch distributed tokens to Ethereum wallets that had interacted with the protocol, provided the address met at least one of these conditions:
- Completed at least one trade before September 15, 2020,
- Conducted at least four trades in total, or
- Accumulated a minimum of $20 in trades.
In the second airdrop, 1inch allocated tokens to Uniswap traders who had never used 1inch based on the following criteria:
- Engaged in trading on at least 20 unique days, and
- Executed a minimum of three trades in 2021.
Through the first airdrop, 1inch aimed to reward its devoted supporters. In the second round, the protocol sought to generate buzz among potential users and attract them to the project.
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