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Crypto airdrops: What are they and how do they work?

Cryptocurrencies

A cryptocurrency airdrop is a process by which developers of new crypto invite users to participate in their ecosystem. If you are part of an airdrop, the team will give you some free coins or tokens for being one of the first users to show interest.

Airdrops can be seen as a way to increase the number of people using nascent crypto. This is because new users are more likely to find ways to engage with the network if they feel confident about it. 

In recent months, we have seen airdrops become popular, as many small cryptocurrencies see airdrops as an excellent strategy to grow their user bases. 

You may be wondering: what's so good about them? Well, that depends on how reliable the team behind them is. Some airdrops offer users the chance to participate in a new project without having to pay money for it. But some charge their participants for access and use the money they earn from people to pay for the airdrops. 

El Dorado will explain in this blog everything you need to know about airdrops, and we will give you some essential tips so that you always keep your savings safe.

What are airdrops?

Airdrops are similar to giveaways, but instead of holding a raffle, the team developing a new cryptocurrency gives its users "free" tokens for trying out their network, performing some tasks, or participating. 

Sometimes all users who signed up for the airdrop receive tokens, or other times it's just a matter of luck. Usually, you can find airdrops on Twitter. Still, you have to be careful with the links, many people, with the help of phishing, pretend to be the actual airdrop, and instead of receiving free cryptocurrencies, you can end up losing all the ones you already have.

How does an airdrop work?

The vast majority of airdrops are free, and the most common way to receive those free tokens is by filling out a form, or in case it's a whole new network, you have to use your native token on a testnet and do simple tests.

As we mentioned, you can find new airdrops on social networks or crypto forums. Once you have completed the form or the tasks, the selected users will receive their cryptocurrencies in the wallet they previously wrote on a date established by the team. 

And that's how airdrops work.

Types of airdrops

  • Free: These are the most common, where some users receive tokens for participating or performing simple tasks.
  • Token bonuses: You can find coins that give you a certain number of tokens at no cost. This is different from free airdrops as it is more like an extra gift for using that token.
  • Vesting: In these airdrops, you are given the tokens in an account with a rule that you have to hold the tokens for a certain period before receiving any real value from them.

Are airdrops safe?

Airdrops are usually safe, but you must be very careful not to fall for a scam or phishing created by a third party. 

If it is your first time, it is best to participate in airdrops made within a known exchange since the exchanges that host airdrops require that the developers submit reports of the tokens to avoid scams.

In any case, it is always essential that you do your research, and if you do not know much about the topic, it is better that you first learn enough to understand for yourself how to identify when it is an actual airdrop or a simple scam. 

How to know if an airdrop is reliable

The first thing you should do is look at the support of the crypto community in general, look for conversations on Twitter of reliable accounts and do a little digging to find out people's honest opinions about that airdrop. If you see many users complain or accuse that it may be a possible scam, it is best to stay alert, as it is probably a risky airdrop. 

Check the network or exchange where the tokens will be delivered; this can also help you identify how reliable the airdrop is. 

One last general advice is never to use your main wallet for airdrops. Create a new one where you do not have funds that you use, especially for these cases; in this way, you will keep your assets safe in case something terrible happens.

Airdrops are how many projects give away tokens in exchange for showing interest. This becomes a promotion that ensures much faster growth as new users help the cryptocurrency gain traction and grow its user community.

If you made it this far, remember to join our Telegram community, where we regularly discuss these topics. Also, we invite you to create your account in El Dorado and start saving with stablecoins or bitcoin. The best is that you can buy cryptocurrencies with your local currency using one of our +30 available payment methods.

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