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What Are The Benefits And Pitfalls Of An ICO Airdrop?

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What Are The Benefits And Pitfalls Of An ICO Airdrop?

Is it possible that money can literally fall from the sky? What about cryptocurrencies, can an ICO fall from the sky down to earth?

These questions are begging for answers and this guide is dedicated to providing the right answers you need!

The ICO industry has become a well-known crowd-funding means for new cryptocurrency projects. The ever-increasing competition in the industry made it a necessity for new ICOs to look for ways of attracting new investors that will fund their projects or start their platform right from the beginning. As a result, many ICOs are implementing airdrop campaigns nowadays.

Airdrops have become a great alternative to investors who don’t want to convert their money into tokens or cryptocurrencies but still want to take part in these ICOs. Unfortunately, many investors don’t understand the role airdrops play very clearly. So, it would be rather interesting to dig deep into what ICO airdrops are and how to take advantage of them.

What is an ICO Airdrop?

In the cryptocurrency world, the term airdrop simply refers to gifts or free money. Is that all? No!

An ICO airdrop is a reward system whereby a development team, company, or a crypto-community decides to distribute some of their tokens to users or holders of other coins free of charge. Coin teams employ this marketing strategy from time to time as a way to increase awareness to potential investors.

How to Check Your Tokens

Cryptocurrencies have been doing airdropping for quite awhile now, right from the time Ethereum launched its first ICO. As such, you can check your tokens when you open your wallet. However, opening your wallet by directly using your private key to check your tokens is risky.

Your best bet is to open your account on Etherscan. The Token Tracker feature inside your Etherscan wallet located at the top right row is housing the tokens. So, if you can see the tracker, it shows you have tokens. On the other hand, if you cannot see the tracker, it means you have no tokens or airdrops.

How Airdrops Came to Existence

You might have observed that you have some additional tokens in your account, especially if you have an ETH balance. So, you might have thought that somebody sent you some tokens by mistake.

The reality is that this is not a random deposit. What happened is that sometimes, the Ethereum team might decide to give a few tokens to all its ETH wallet users. They do this to help them spread the word about their ETH wallet.

After receiving the tokens, it is likely that you’ve reacted in any of the following three ways:

  1. You might have researched the matter to know what the coin is about. Thus, you learned about the company and its product.
  2. You might have taken a step further by asking someone else if they knew what the token was all about.
  3. Lastly, you might have chosen to ignore it.

Now, if you had chosen the last option, it means that the purpose of the airdrop was not achieved. though, the first and second options made you research it and also tell other people about it. Thus, these two reactions achieved the aim of the airdrop although the latter option is the best. This is so because you have spoken to somebody about airdropping and spread the word about it. This costs the company next to nothing.

Airdrop: A Marketing Tool?

Based on the nature of airdrops, they are actually used beyond marketing. They became a means of pumping coin value.

Example: A coin would announce an airdrop where coin holders or users would receive additional coins that are proportional to the number of total coins in your account. This action alone encouraged coin investors who didn’t have any coin yet to buy the coins or to purchase more if they wanted a larger amount of the airdrop or tokens.

That said, this guide is not focusing on an airdrop as a way to increase coin value. Rather, the aim of this guide is to discuss how you can receive free coins and not how you can get tokens by purchasing more coins.

Following Facebook’s new advertising policy explicitly banning ICOs, many cryptocurrency projects have resorted to airdrops as the only alternative to pay-per-click advertising. Since many cryptocurrency projects are consumer-based products, they focus their attention on viral growth through networking. This means that they use the strong referral system to spread the word about any airdrop.

Tools Needed to Participate in Free Airdrops (How to Get Airdrops)

You should be properly informed if you want to get on the airdrop action. Accordingly, you need to belong to the right forums where airdrop announcements are initially made. This entails following the right people on Twitter, becoming a member of Telegram groups, and any other online website that makes announcements of airdrops.

Furthermore, you must have a cryptocurrency wallet where the airdrop will be actually deposited. The wallet must be a personal address that is ERC-20 compatible as most of the airdropped tokens are ERC-20 tokens. You can get started with MyEtherWallet. Your Ethereum wallet must be active – showing activity before you can receive an airdrop.

Why Do ICO Airdrops Take Place?

Airdrops add real value to ICOs for a number of reasons:

To reward loyal clients – Airdrops can be a great way to reward loyal customers as it will encourage them to continue using their products and services.

To generate quality leads – One of the major aims of marketing is to generate leads that would one day turn to potential customers. By using an airdrop, coins will capture essential information about the individuals who indicate interest in their products and use them to re-target those clients.

To announce a new cryptocurrency – There are many cryptocurrencies in the market. These cryptocurrencies would go unnoticed without proper marketing advertising. For it to gain traction in the market, a lot of hype and buzz has to go into it. Investors are keen on investments in new cryptocurrencies and when you advertise yours, you are giving them something to bite on.

Be Security Conscious

Unfortunately, the crypto world has a lot of bad eggs looking to take advantage of innocent investors. An airdrop is no exception! Here are some important tips you need to know to avoid being ripped off.

  • Do not send your private keys

You shouldn’t send your private keys to anyone to check your wallet balance. You can do that very easily using Etherscan.

  • Do not pay for airdrops

Airdrops are free and will never ask you to send any amount of coin to some kind of address.

  • Check credible sources

Before you give out your details for any airdrop, make sure you cross-check every information you have to ensure it’s coming from a credible company. The company’s Twitter account or an established forum is a reputable place to find information about an airdrop.

Final Thought

Airdrops have become useful techniques for creating awareness about an ICO and to give loyal customers incentives. They are great tools for developers of new cryptocurrency projects to gain some recognition. Though, you must ensure to always confirm the authenticity of an airdrop before taking part in it.


This article should not be taken as, and is not intended to provide, investment advice. Users are ultimately responsible for the investment decisions he/she/it makes based on this information. It is your responsibility to review, analyze and verify any content/information before relying on them. Trading is a highly risky activity. Do consult your financial adviser before making any decision. Please conduct your thorough research before investing in any cryptocurrency and read our full disclaimer.


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