We have to learn how cryptocurrency storing works. As well as how the stake, fork, and swap works. Now we are learning about cryptocurrency airdrop.
In a war, soldiers sometimes have to stay in a secluded area for a long time. When they run out of supplies, they will have other soldiers air-dropping their supplies as the plane passes by. This is airdrop, but what about the crypto airdrop?
The meaning is similar. Of course, what is falling is different. Items fall in games, supplies in the military, and cryptocurrency in the blockchain project. In other words, they give us cryptocurrency for free. Investopedia describes it as “a marketing stunt that involves sending free coins or tokens to wallet addresses to promote awareness of a new currency.”
Airdrops have many different purposes, but they are similar. It generally aims to boost the currency by increasing the number of cryptocurrency holders. Airdrops are a marketing strategy for currencies.
Cryptocurrency airdrop: why it happens
It is a method that happens a lot in such cryptocurrency communities or exchanges to airdrops cryptocurrency as compensation. From the project’s perspective, you can try to experience the cryptocurrency. And from the exchange’s point of view, you can see the effect of increasing the volume of trading. Cryptocurrencies sometimes rise suddenly on the exchange, often due to airdrop events.
Airdrops are sometimes also had the purpose of paying cryptocurrency holders like interest. In this case, they receive cryptocurrency based on a certain point in time with the number of reserves that might vary depending on time. It is called taking a “snapshot” to set a certain point in time and check the amount of reserves.
In addition, airdrop events may be conducted on their own. If you make good use of the event, you can enjoy a lot of fun. This is because many cryptocurrency transactions are running airdrops as events.
Although users say it is good because they can receive cryptocurrency for free, some view it negatively. This means that the project will result in an increase in the volume of supplies that have not been released to the market. However, it is necessary to keep a close eye on the situation because not all cases are this.