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What Are Crypto Airdrops and How Do People Claim Free Tokens?
- Raj Karle
- Jan 8
- 8 min read
Updated: Jan 19
Crypto airdrops are a token distribution method used by blockchain projects. Tokens are sent directly to user wallets. There is no requirement to make a purchase. The objective is to increase usage and awareness.
Airdrops have increased in scale over recent years. Several major networks have distributed tokens worth billions of dollars. These events frequently reward early users and on-chain activity. These are no longer random giveaways.
Projects use airdrops to attract users without selling tokens. This approach is designed to facilitate early liquidity. Furthermore, it facilitates the distribution of ownership across multiple digital wallets. This approach fosters decentralised network growth.
In the current business environment, user behaviour is a key factor in airdrops. The decision about eligibility is determined by wallet activity, transactions, and protocol usage. Consequently, airdrops are linked to the way in which people interact with blockchains.
The following sections provide detailed information on the functionality of airdrops. We will also discuss the reasons why projects utilize them.
Key Highlights:
Crypto airdrops distribute tokens directly to wallets without requiring a purchase. They use on-chain data to determine eligibility.
Modern airdrops reward real user activity, such as transactions and protocol usage.
Retroactive and activity-based airdrops have replaced early giveaway models.
Eligibility depends on wallet history, snapshots, and behaviour, not luck or random selection.
While airdrops can deliver value, they carry risks, too.
What a Crypto Airdrop Actually Is
A crypto airdrop is a method of distributing tokens to users without charge. The tokens are sent directly to a wallet address. No payment is required. The wallet simply needs to meet certain criteria.
Airdrops are created by blockchain projects. New network providers use this strategy to attract users. Established platforms utilise them to reward early users. In some cases, the implementation of an airdrop can be used as a strategy. It can transfer control from a company to the community.
Token distribution is conducted on the blockchain. The project generates a list of eligible wallet addresses. Smart contracts then send tokens to those wallets. This process is automated and recorded on the blockchain.
There are two main types of airdrops. Announced airdrops are shared in advance. Projects are responsible for publishing rules and timelines. Users are required to complete tasks prior to the specified snapshot date. Unannounced airdrops are a separate matter. Tokens are distributed to users without prior notification. Eligibility is determined by an evaluation of past activity.
Unannounced airdrops have become increasingly prevalent in recent years. They offer incentives for genuine usage. In addition, they help to minimize abuse from fake accounts. This shift has changed how users interact with new blockchain platforms.
Common Types of Crypto Airdrops
Crypto airdrops exhibit distinct patterns. Each type of content serves a different purpose. The structure is dependent on the objectives of the project.
1. Standard Airdrops
Standard airdrops are the simplest form. Tokens are issued to users who register an address. Note that some of these require a sign-up. Some individuals require a wallet connection. These airdrops were a common occurrence during the early crypto cycles. The primary focus was on achieving rapid user growth.
The value is often negligible at the point of launch. Many standard airdrops are used for awareness. Unfortunately, this model has declined over time due to mistreatment.
2. Retroactive Airdrops
Retroactive airdrops are a strategy employed to incentivise past users. The project captures a comprehensive view of on-chain activity. Users who interacted before a certain date will receive tokens. No further action is required.
This model gained prominence after 2020. It is designed to incentivise real usage. It also serves to discourage the use of spam wallets. Some airdrops in the history of cryptocurrency have followed this model.
3. Holder-Based Airdrops
Holder-based airdrops are a reward system that incentivises users to hold a token. Eligibility is determined by the balance in the wallet at a given time. The allocation is dependent on the number of tokens held.
This method is used to strengthen loyalty. It also encourages long-term holding. This structure is utilised by numerous Layer 2 and DeFi projects.
4. Activity-Based Airdrops
The feasibility of activity-based airdrops is dependent on usage. It is imperative that users perform specific actions. These may include swaps, staking, or governance votes. The objective is to enhance authentic engagement.
This model aligns incentives with adoption. It is now one of the most common airdrop formats.
Airdrop activity has seen a notable rise in recent years.
Major Airdrop Activity by Year
Year | Number of Major Airdrops | Avg. Value per Wallet | Data Source |
2021 | ~40 | $1,000+ | |
2022 | ~60 | $500–$900 | |
2023 | 150+ | $300–$1,200 | |
2024 | 120+ (ongoing) | $400–$1,000 |
Industry trackers report over 150 major airdrops in 2023. The number remained high throughout 2024. At the time of launch, the average token value ranged between $300 and $1,200 per eligible wallet. Large retroactive airdrops resulted in higher totals.
This trend indicates a shift in focus. Airdrops are evolving beyond their traditional role as mere marketing tools. These days, they are used as mechanisms for recognising ownership and rewarding employees.
How People Qualify for Airdrops
Airdrops should not be viewed as random giveaways. The majority of these systems are governed by clearly defined rules. These rules are incorporated into smart contracts or project criteria.
1. Wallet usage requirements
Projects frequently necessitate active wallet usage. This may include the requirement to maintain a minimum balance. Some require interaction with a specific network. Some companies are keen to adopt these measures as soon as possible.
The age of the wallet can be a relevant factor. Older wallets often qualify more easily. This helps filter out newly created addresses.
2. On-Chain Activity Tracking
The majority of airdrops are dependent on on-chain data. Smart contracts are designed to record every transaction. Projects then review this data to identify real users.
Common actions include swaps, staking, or liquidity provision. Votes cast during governance proceedings are also tracked. It is imperative that the activity is completed prior to the specified deadline.
3. Snapshot dates and eligibility rules
A snapshot is a record taken at a specific point in time. It accurately captures wallet balances and activity. Note that only data from this point onwards will be taken into account.
Users who meet the rules at the snapshot qualify. Those who act after do not. This measure is designed to prevent any potential last-minute manipulation.
Why some users qualify and others do not
Eligibility is often dependent on consistent usage. One-time actions may not be considered. Note that minor or intermittent activities can often be of greater significance.
Some wallets are vulnerable to Sybil filters. These filters are designed to block users who split activity across multiple wallets. Projects are designed to incentivise authentic engagement.
This structure supports fairness. It is designed to reward long-term users. Furthermore, it safeguards the distribution of tokens to prevent any potential misuse.
How Airdrops Are Claimed (Step-by-Step)
Airdrop claims are processed in accordance with the standard on-chain procedure. The steps are technical, but the flow is consistent across most networks.
1. The Wallet Connection Process
The user then connects a self-custody wallet to the project's website. This connection does not facilitate the transfer of funds. The site is only able to read wallet data. The system then performs an eligibility check on the address.
2. Smart contract claim functions
If eligible, the user can initiate a claim function. This action is executed through a smart contract. The contract verifies the wallet address. The system then releases the allocated tokens.
The transaction will require approval from the wallet. The private key remains on the device at all times.
3. Gas Fees and Timing
Note that claiming tokens usually requires a network fee. The fee is subject to variation depending on blockchain congestion. During periods of high activity, fees may increase.
Some projects set claim windows. Tokens must be claimed before the deadline. Unclaimed tokens may be burned or redistributed.
What happens after tokens are claimed
Once claimed, the tokens will appear in the designated wallet. The user now has full ownership of the product. In certain instances, tokens may be locked or vested.
Note that trading may not commence immediately. Liquidity is often a secondary consideration. This delay helps to reduce early selling pressure.
Real Examples of Major Airdrops
Several large crypto projects have used airdrops to distribute tokens. These cases show the functionality of airdrops in actual markets.
1. Uniswap (UNI)
Uniswap launched its UNI token in 2020. The airdrop rewarded early users of the decentralised exchange. Wallets that had previously interacted with Uniswap before a specified date received tokens.
The objective was to facilitate user ownership. The governance of the community has been transferred to its members. It also set a model for later DeFi projects.
2. Arbitrum (ARB)
Arbitrum introduced its ARB token in 2023. The airdrop targeted users who had bridged funds and used apps on the network. The history of activity played a key role in determining the size of the allocation.
This airdrop demonstrated the potential for significant Layer 2 growth. It also demonstrated how usage metrics can replace simple wallet snapshots.
3. Optimism (OP)
Optimism used multiple airdrop rounds instead of a single event. Tokens were distributed over time to active users and contributors. Participation in governance was also found to be significant.
This approach focused on long-term alignment. It rewarded ongoing network support, rather than one-time actions.
4. Ethereum Name Service (ENS)
ENS distributed tokens to users who owned or managed domain names. The resources allocation depends on the duration of registration and the usage extent. Long-term users were allocated larger shares.
The ENS airdrop has been shown to have a positive effect on user loyalty. It also demonstrated the ability to measure non-financial activity on-chain.
Major Crypto Airdrops and Estimated Value
Project | Year | Tokens Distributed | Est. Value at Launch | Users Rewarded | Source |
Uniswap (UNI) | 2020 | 150M UNI | ~$1.2B | ~250,000 | |
ENS | 2021 | ~25% supply | ~$1.5B | ~137,000 | |
Optimism (OP) | 2022–23 | Multi-round | ~$1B+ | Ongoing | |
Arbitrum (ARB) | 2023 | 1.16B ARB | ~$2B | ~625,000 |
Risks and Misconceptions Around Airdrops
Be aware of potential fraudulent activity involving airdrops and links.
1. Scam airdrops and fake links
Note that not all airdrops are legitimate. It is common for fraudulent campaigns to mimic the names of authentic projects. They distribute misleading claim links via social media and messaging applications. When a wallet connects, there is a risk of malicious contracts draining funds. This risk is heightened during high-profile launches.
2. Tax Considerations
Airdropped tokens may be subject to tax obligations. In many regions, tokens are treated as income at the time of receipt. The value used is often the market price on the claim date. This creates tax exposure even if the tokens are not sold.
3. Token price volatility after launch
Some airdropped tokens experience considerable price movements following the commencement of trading. It is not uncommon for there to be early selling pressure. Prices can decline rapidly once recipients realise their profit. Note that short-term value and long-term potential are not always aligned.
Why free tokens are not “free money”
It should be noted that airdrops incur indirect costs. Gas fees are required to claim tokens. A significant amount of time and attention is dedicated to tracking eligibility. Price risk and tax impact further reduce the idea of guaranteed profit.
Conclusion - Why Airdrops Still Matter!
Airdrops remain a key method for crypto projects to distribute tokens. They ease projects in reaching their target users without traditional fundraising methods. This approach fosters greater token ownership from the outset.
Airdrops also play a role in decentralisation. Tokens are often given to users who actively use the network. This approach ensures that ownership is aligned with genuine participation.
It is important to understand how airdrops work. It assists users in evaluating value, risks, and fairness. Airdrops remain a powerful tool in a market where incentives shape behaviour.
This content is for informational purposes only and should not be taken as solicitation, recommendation, endorsement or investment advice. It is crucial for you to conduct your own research and due diligence to make informed decisions, as any investment will be your sole responsibility. Please review our disclaimer and risk warning.
