What Is An Airdrop?

“Okay, but what is an airdrop?” is a question that we get emailed almost daily by people who are just starting to get interested in crypto.

When a new cryptocurrency is created, the developers will understandably want to get the word out. They could do this by running ads, by writing news articles, or, they could do it by hosting an airdrop. So, what is an airdrop? To put it simply: Cryptocurrency airdrops are just a fancy way for developers to give out free samples of their coins or tokens.

Example Airdrop

Let’s say that a new token, known as AirdropToken, has just been created. The developers want to let the whole world know, so they decide to give 5% of their creation away for free in the form of an airdrop.

There are a number of ways that they could do this, but they want the airdrop to be as simple as possible for their users to participate in, so they decide that an Ethereum wallet address is all that’s required. This makes sense, since AirdropToken is an ERC-20 token, meaning it is stored on the Ethereum blockchain and can be sent directly to the participant’s Ethereum wallet address.

The team behind AirdropToken announce their airdrop all over social media, and they also have it listed on a really cool website known as Airdrop Scouter. Thousands of eager crypto enthusiasts flock to their website to participate in the airdrop. These enthusiasts enter their Ethereum wallet address, press “submit”, and then they wait for the airdropped tokens to reach their wallet.

A few days later, after the AirdropToken team have built up enough hype for their new cryptocurrency, they begin to distribute the AirdropTokens. They send 500 AirdropTokens to each participant’s Ethereum wallet address, and with that, the airdrop is now complete. The participants can now sell, trade, or hold their AirdropTokens as they see fit.

What’s next?

The example mentioned above is a very simple way of conducting an airdrop. In reality, most airdrops will be slightly harder to participate in, and will require the participant to supply more information than a lone Ethereum wallet address. To learn more about the various types of airdrop participation requirements, take a look at our entering airdrops guide.