By ICO Alert
- Airdrops raised more than $4.5B for blockchain projects
- Crypto-related Airdrop community recipients essentially receive free money
During the past 6–12 months airdrops have become something of a buzzword in the cryptocurrency community. The sudden explosion of airdrops can be linked to the steep growth of the ICO market in 2017, where blockchain projects managed to raise over $4.5 billion through this new form of financing.
Why This Matters: Simply stated airdrops allow crypto-related projects to distribute a certain percentage of its total token supply to its community. If this concept seems familiar it’s because ICOs are very similar. The main difference is that tokens distributed as part of an airdrop are given free of charge to a project’s community, so recipients do not need to buy the new tokens, as is the case in an ICO.
Airdrops help the team behind a project achieve a number of goals essential to the growth of their venture. Also, projects are likely to reach and interact with a wide number of people, while recipients essentially receive free money. An active community has many benefits for a cryptocurrency project, including group participation, increased adoption, along with more developer contribution.
Situational Awareness: Airdrops aim to capitalize on the fact that many people like to receive free gifts, especially in the form of free money. In the crypto space, this can be witnessed on a greater scale as people are keen to acquire new tokens to take advantage of a potential rise in value.
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