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What is Airdrop and what does it do?

by Financial Economy

There are thousands of cryptocurrencies worldwide. However, the number of people investing in digital currencies is increasing day by day. Airdrop is one of the concepts that people who are interested in the cryptocurrency exchange are familiar with. So, what is airdrop and what does it do? You can check out here for information about Apecoin (APE).

What is Airdrop and what does it do?

Airdrop is a marketing method that involves sending tokens or coins to wallet addresses to raise awareness of a new cryptocurrency. In this method, users are sent small amounts of tokens or coins for free in exchange for various small services such as sharing a tweet about that cryptocurrency.

In addition to cryptocurrencies, NFT products, which are actually non-exchangeable tokens, can also be airdropped. Many NFT collections are airdropped today.

The purpose of the airdrop method is mostly to promote a new cryptocurrency. With airdrops, it is aimed to deliver a cryptocurrency to more people. From time to time, blockchain-based service providers such as cryptocurrency exchanges or wallets may also use the airdrop method to reward their loyal customers.

Airdrops are usually promoted on the company’s website, cryptocurrency forums or social media. To take advantage of airdrops, you must have a cryptocurrency wallet address.

What is the difference between Airdrop and Initial Coin Offering (ICO)?

Airdrop events are different from Initial Coin Offering (ICO) events. The purpose of ICO events is to finance a new cryptocurrency. ICOs are not free and these events are paid in exchange for other cryptocurrencies. An airdrop is completely free.

In fact, most of the time, airdrops are organized to increase participation in ICO by increasing awareness of a new cryptocurrency. Thus, a new token or coin can make a much stronger entry into the market.

Airdrop types!

Airdrops can be roughly classified under four headings: Award airdrops, standard airdrops, holder airdrops, and hard fork airdrops.

In prize airdrops, cryptocurrency is awarded in exchange for the participant’s services, such as posting on social media or tagging friends in a post. Prize airdrops may also be distributed as a result of a draw.

Standard airdrops are types of airdrops where the user can easily register by entering their first and last name or email address. The purpose of these airdrops is usually to create a large user information network.

Holder airdrops require the participant to have a certain amount of the corresponding cryptocurrency in their wallet in order to be eligible for the airdrop. This airdrop aims to reward token holders.

Finally, hard fork airdrops are issued for forked coins. These coins are airdropped to original coin holders.

Caution: The information contained in this content is for general informational purposes only. It is not investment advice.

For information about cryptocurrency: https://en.wikipedia.org/wiki/Cryptocurrency

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