If you have spent sometime in the NFT space, you may have heard the term airdrop. It is not related to Apple’s airdrop but it is a distribution reward for cryptocurrency wallets for various reasons. Let us discuss what is an NFT airdrop.
What is an NFT airdrop?
An NFT airdrop is a way of tokens distribution to a Web 3.0 wallet address through the blockchain as a promotion, a reward for holding NFTs, or for participating in a specific activity.
NFT space has became very competitive with many creators entering the market increasing the supply, while existing creators looking for ways to add value to their holders. And one way to do that is through the airdrops.
But why do they do it?
Given everything is recorded in the blockchain technology (public ledger), it is easy to target the audience you want with airdrops and that is a powerful marketing tool!
Let us say a promoter want to target new user base, one way to do that for example is to target high net worth individual from one of the most expensive projects like Cyberkongz or Bored Apes Yacht Club.
Airdrops has open the potential for marketers to target their customers differently on web 3.0 based on their wallet beyond the traditional or social media marketing tactics.
A creator with existing user base want to add more value to his holders, if a successful collection is doing well. Holders may be tempted to sell out to get some profit, and one way to reduce that possibility is to give them an airdrop to sell instead of the main project item.
From the other point of view, other users may want to join a well-known ecosystem but the entry price is high. For example, ITFK Relentless Key holders are worth 0.12 Eth, early holders received a signed LifeMap airdrop which is now worth around 0.01 Eth. It is cheaper to buy the airdrop if you want to have a piece of this ecosystem without over spending.
In Summary, doing an NFT airdrop allows new creators to get users awareness and the existing creators to reward and retain their holders.
Types of NFT airdrops
There are many ways to do airdrops which include
- Standard/Bounty Airdrops: are airdrops given to users who complete a required action. Like simply signing up on a website.
- Holders Airdrop: are the ones that are sent to loyal holders of the project for holding certain quantity of the NFT or duration.
- Hardfork Airdrops: are when the situation a team have to change their contract type to further build/fix their project which forces them to re-send new NFTs to their holders.
How does NFT Airdrops Work
One way a creator can do an airdrop is through the standard airdrop method. By asking users to take certain action and collect their wallet addresses to be eligible for the airdrop.
Another way a creator can do an NFT airdrop is by targeting certain holders. Whether it is for promotion or redistribution. it can be done through programming a script to generate a snapshot of the targeted holders.
This method is possible because everything is recorded on a general ledger so it is easier to get contract details of NFT projects and all the holders in a given time.
For example, this is the link for contract address of VX Deluxe. You will be able to see all the transactions that occurred. And a snapshot will simply allow you to track the collection holders at that given time.
Above is screenshot on how you can find a contract address:
1) You would go OpenSea website
2) Search for a collection you want to look at their contract address
3) Within the collection, click on any item, and below the NFT picture under details you will find the contract address.
Just be careful from airdrops
Let us be realistic, some airdrops are amazing and successful, but there are many that are bad and some are even scams. Just keep in mind:
- Never share your private keys (12-24 wallet pass phrases).
- If you can, check out the website from a browser that doesn’t have your wallet connected. It could be phishing for information.
- There is no need to rush, check out Twitter and search the airdrop. see if a well-known user have analysed the contract
You do not have to claim any airdrop, many of their values go to zero.
Airdrops are useful whether for promotions or just to add value to an NFT project. If you dig deep, majority are worthless. But the successful few are a delight to have.
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