Crypto Airdrops 2023: How They Work and Where to Find Airdrops

  • January 7, 2023
  • 5 Min Read

Whoever said money doesn't fall out of the sky didn't know about crypto airdrops. We explain what airdrops are, how they work, and how to get in on the airdrop action.

What is an Airdrop in Crypto?

An airdrop is a promotional activity that involves distributing digital tokens, often for free, to many wallet addresses. Decentralized projects often distribute tokens to people that show an early interest in the project, and this can encourage usage of the distributed token. Airdrops present an opportunity for users to get their hands on tokens early that may appreciate in value in the future, but they also pose risks such as cyber-attacks.

Types of Airdrops

Type of airdropStandardBountyHolderExclusiveRaffle
MechanismProvide your wallet address and receive the tokensParticipants complete tasks to receive tokensHold a specific amount of another token to qualifyWallet addresses are chosen based on custom criteria by the project managersTokens are distributed via a lottery system

There are different types of crypto airdrops, including:

  • Standard Airdrop

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    In a standard airdrop, people interested in receiving tokens from the airdrop can indicate their interest early and provide a wallet address where the tokens will be sent. It often requires no additional information apart from a wallet address, but some projects can request information like an email for marketing purposes.

    Standard airdrops usually have a fixed number of tokens to be distributed and a limit on how many tokens an individual can receive. This is the most popular type of airdrop because of its simplicity. However, a major challenge with standard airdrops is that some people create multiple wallets to receive tokens, reducing the supply from the fixed pool.

  • Bounty Airdrop

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    A bounty airdrop involves people performing specific tasks in order to receive the tokens. A common task is to create awareness for the project by posting on social media platforms or retweeting tweets about the project. Users may be eligible for referral bonuses if they recruit other users or extra rewards if they sign up for the project's newsletter or join the project's Discord channel.

    In this type of airdrop, participants receive points for completing tasks that correspond to the number of tokens they'll receive. They may also be required to earn a specific number of points before they can qualify for an airdrop.

  • Holder Airdrop

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    A holder airdrop guarantees a specific number of tokens for users holding a specific amount of another digital token. The disadvantage of this type of airdrop is that it primarily benefits the largest token holders, i.e., "whales". Besides, some token holders may not want the airdrop and end up burning the airdropped tokens that could have been useful to other people.

  • Exclusive Airdrop

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    An exclusive airdrop involves the stewards of the decentralized project selecting people that'll receive the airdrop based on their chosen criteria. For example, they could airdrop tokens to wallets that interacted with their protocol before a specific date or wallet addresses tied to people who promoted the project on their social media pages. The criteria are up to the managers of the project, and it often tends to favor insiders over the public.

  • Raffle Airdrop

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    As the name suggests, this type of airdrop works similarly to a raffle draw. Intending recipients can express their interest, and the managers of the project randomly select a number of wallets that'll receive the tokens. Some projects may require users to perform tasks to earn a raffle ticket, such as a shoutout on their social media pages.

How Do Crypto Airdrops Work?

The first step of a crypto airdrop is the project or company deciding they want to perform an airdrop. Such a decision can be attributed to many factors, such as incentivizing existing investors or competitive pressure. Afterward, the project will decide on the type of airdrop to implement and the eligibility criteria.

The next step for standard airdrops is to launch a public campaign to create awareness. You'll often find projects running social media advertisements inviting users to an imminent airdrop. The campaign also involves collecting wallet addresses for the airdrop and additional information like email addresses to grow their subscriber list.

Some other types of airdrops, e.g., a holder airdrop, may require intending recipients to provide a snapshot of their wallet proving they hold a specific amount of another token. Either way, the managers of the project will decide the final list of airdrop recipients from their chosen criteria. Afterward, it’s time to implement the airdrop.

Airdrops are often performed using smart contracts. The project may decide to use its Treasury wallet to send tokens to the eligible wallet addresses and will often publicize the transaction block to prove that the distribution was equitable. The block will show the tokens leaving the Treasury wallet and getting distributed to the recipients.

History of Crypto Airdrops

The first crypto airdrop took place in 2014, and many more airdrops have followed suit. Here’s a timeline of some of the most notable airdrops:

2014: Auroracoin

Auroracoin airdrop

Auroracoin was the first recorded airdrop that occurred in March 2014. It was an alternative to Bitcoin developed for the citizens of Iceland. Tokens were airdropped free of charge to claimants with verified IDs in Iceland's national identity database beginning in March 2014. The final phase of the airdrop occurred in November 2014, with over 40,000 claimants having collected tokens. Afterward, the unclaimed coins were burned by sending them to an invalid address.

This project was what coined the term “airdrop” and paved the way for many more airdrops that followed.

2016: Lumen

Stellar airdrop

In 2016, the Stellar Development Foundation (SDF) distributed its Lumen coins to people who owned Bitcoins on various exchanges — a fitting example of a holder airdrop. It invited BTC holders to verify that they control their wallet address and receive Lumen tokens (XLM) as a reward. This airdrop gave 3 billion Lumen tokens out of a planned total airdrop of 19 billion.

The Stellar Development Foundation has continued to issue Lumen tokens in successive airdrops since 2016. This is the biggest example of a holder airdrop in the crypto sphere.

2020: Uniswap

Uniswap airdrop

In September 2020, the Uniswap decentralized project ran an exclusive airdrop for its governance token, UNI. It airdropped at least 400 UNI tokens to every wallet address that interacted with the Uniswap protocol before September 2020. The airdrop stimulated activity for UNI tokens, helping it become one of the most traded tokens currently.

2022: Aptos

Aptos airdrop

Aptos (APT) was one of the most hyped blockchain projects in 2022. In October 2022, The Aptos Foundation airdropped 20 million APT tokens to over 110,000 participants who were early users of its network. The airdrop represented 2% of APT's initial supply of 1 billion tokens. It helped propel the Aptos blockchain to higher heights shortly after its launch.

Upcoming Airdrops

Airdrops haven’t stopped occurring even amid the crypto market crash of 2022. There are many upcoming airdrops you can look forward to, and the most notable ones include:

  • Tamadoge: This is a blockchain-based play-to-earn game where you can mint and breed virtual characters. Since 2022, it has held regular airdrops for its native TAMA token and will continue to do so in 2023.
  • Wild Thunder Studio is a game studio specializing in blockchain-based games like Realms Of Eternity. It has kickstarted a raffle airdrop for 35 million units of its native WTT token, and you can participate in the lottery.
  • Streamr is a decentralized, real-time data network, and its native DATA token is used for payments on the network. The company is running an ongoing bounty airdrop, so you can complete specific tasks in exchange for tokens.

How to Find Crypto Airdrops

  • Social Media: Crypto companies often promote their upcoming airdrops on social media platforms like Twitter, Reddit, and Telegram. Build an account on the platforms that interest you and start curating a list of accounts or topics to follow. Remember, don’t share your private keys. Social media remains the wild west of crypto, so be safe.
    • Reddit: On Reddit, a topic is called a subreddit. Consider joining r/CryptoAirdrop and r/CryptoCurrency as well as any subreddits relevant to the projects you’re interested in.
    • Twitter: On Twitter, you can use tags as a basic way to filter by topic. For example, you can try the #airdrops tag to see which projects announced an airdrop. You might find a few accounts to follow as well using this search. Also, use the search bar to find projects you want to follow. Consider following the Twitter accounts for the platforms mentioned below as well. For example, AirdropKing has an active Twitter feed loaded with airdrop announcements.
    • Telegram: You can find info on airdrops by joining groups on Telegram, which is only accessible via the Telegram app or web app. Some of the largest crypto airdrop groups include Crypto Library's Airdrop, Airdrops for All (including NFTs), and Airdrop.
  • Airdrops.io: On Airdrops.io, you can sort or search to find crypto airdrops. Use the navigation bar at the top of the page to sort by Latest or Hot airdrops. Click through to the detail page to learn more about the project and eligibility requirements. Airdrops.io aggregates airdrops found on Twitter, Telegram, and other sources, but we didn’t see Reddit in the list. You might still want to check Reddit occasionally.
  • CoinMarketCap: While other sites act as bulletin boards or aggregators, CoinMarketCap lists airdrops exclusive to CoinMarketCap. Currently, only seven projects list ongoing airdrops and the drops can run out quickly. If you’re looking for freebies, be sure to check often for new listings. Expect to complete some tasks, such as Twitter follows, etc. to qualify for some airdrops.
  • Airdrop Alert: Time is money in the airdrop game because airdrops can run out quickly. Airdrop Alert lets you enable push notifications to your device so you can act fast. The site invites you to sort by airdrop type, including DeFi, NFTs and featured airdrops. Click through to the detail page to learn which steps to take to claim your tokens. To find the latest offerings, use the pulldown menu on top to see the newest airdrops before they run out.
  • AirdropKing: Looking for the newest airdrops? AirdropKing puts them right on the home page. An easy-to-navigate tab system lets you sort by Best-Rated or High-Value airdrops as well as those ending soon. While AirdropKing displays fewer airdrops compared to others, the site clears the clutter of expired drops letting you hone in on actionable drops.
  • AirdropBob: Make the AirdropBob calendar your first stop on the site to find the latest airdrops and airdrops ending soon. You can also use the top menu to search by project to find tokens that fit your crypto strategy. Advanced filters available right from the home page let you search by active status and by blockchain, including Ethereum, Binance Smart Chain, Polkadot, and others.

Prepare to invest some time when searching for airdrops through websites like those listed above. You might find they only offer a handful of tokens, possibly exclusives. Projects can also run through their allocation quickly. For hunting airdrops on social media, consider setting alerts for airdrop accounts you follow so the latest announcements don’t get lost in the shuffle.

  • What to Look For in Airdrops

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    In many tax jurisdictions, airdrops are taxable as income, and if history is any guide, some projects are headed to the abyss. This means not every airdrop is a great find. You might end up paying taxes on tokens that fell to a mere fraction of their initial value.

    Just like when you choose a crypto coin or token to invest in, do your due diligence. Look for projects that seem to have a viable future and take the time to understand what the token’s role is within that ecosystem.

    Also, consider how well the token fits into your investment strategy and whether to hold. As an example, Stellar’s airdrop made headlines as the new blockchain dropped 19 billion XLM tokens in 2017. By early 2018, Stellar’s market cap reached over $13 billion. By April 2018, XLM had lost 75% of its value.

    Think about your exit strategy before you jump in, including ways to sell or exchange your tokens if needed. Thinly traded tokens can be difficult (or pricey) to swap if you need to turn your tokens into cash to pay the tax man or invest in another project.

    Lastly, consider the cost to move tokens on the blockchain. Ethereum-based tokens can be pricier to move compared to Binance Smart Chain or Tron, for example.

    Not every airdrop is found gold, and some might be more trouble than they’re worth. But the next big drop opportunity might still be out there.

Airdrop Scams

Airdrops provide benefits, as people can receive tokens without ponying up capital, but they’re also a venue for scams. You should constantly be on the lookout for some red flags to avoid falling victim to airdrop scams. For one, an airdrop never seeks capital investment in the token — that’s the job of an initial coin offering (ICO). You either receive airdropped tokens for free or in exchange for performing specific tasks. Any airdrop asking for capital to participate in is a fraudulent one.

Hackers also use airdrops to steal identities, which is known as a "dusting scam". This type of scam involves sending small amounts of crypto, called dust, to wallet addresses with the aim of de-anonymizing the recipients when they spend the tokens. Users identified with large holdings can be physically targeted or threatened. To avoid dusting scams, use a new wallet address each time you want to receive airdropped tokens.

Another type of airdrop scam is enticing participants to invest in a specific token with the hopes of being airdropped a different token. The airdrop may eventually be delivered but after the promoters have pumped and dumped their holdings of the advertised token, so beware.

Further tips to avoid airdrop scams include never connecting your wallet to a website you're not familiar with. Also verify that you’re on the correct website link, as airdrops are a frequent target of phishing attacks. Follow the social media pages and Discord channel of the official project to keep up with updates and avoid acting on false information.

Frequently Asked Questions

  • What was the first crypto airdrop?

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    Auroracoin was the first crypto airdrop, and it took place in March 2014.

  • What are some of the best airdrop sites?

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    AirDropAlert, Airdrops.io, and AirdropsMob are some of the best websites to find and participate in ongoing airdrops.

  • Is there an airdrop crypto tax?

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    Yes, tokens received in an airdrop are considered taxable income in some jurisdictions, including the US. The value of the tokens at the time of receipt may be taxable as income. Additionally, this receipt value also serves as your tax basis for calculating capital gains on those tokens in the future.

  • How do I get a crypto airdrop?

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    To get a crypto airdrop, you’ll need to provide your wallet address and, in some cases, complete specific tasks or compete in a lottery.

  • Is there an airdrop alert?

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    Yes, various websites give visitors alerts to upcoming airdrops, e.g., CoinMarketCap and Airdrops.io.

  • Are there free airdrop crypto options?

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    Yes, many projects airdrop tokens to wallet addresses in exchange for nothing.

  • What is the best crypto airdrop?

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    There’s no one “best” crypto airdrop, as many come out daily. But, the airdrops with the highest potential to appreciate are those that are very anticipated across the crypto sphere — Aptos is an example of a highly-anticipated airdrop.

  • Does crypto airdrop make money?

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    Yes, tokens you receive in an airdrop can later appreciate in value and give you profits when you sell them.

Contributors

  • Avatar of Chisom Maduonuorah

    Chisom Maduonuorah is a writer passionate about tech startups, venture capital, the global stock markets, and emerging financial markets like cryptocurrency. When not writing, you can find him staring into the sky pondering what life is about.

  • Avatar of Gary Anglebrandt

    Gary Anglebrandt is a US-based editor, copywriter, and communications consultant with a background in business and international news. Beyond the US, he has worked from Seoul and Beijing, and continues to work with professionals based around the globe.