Airdrop is when the developers of a new digital token distribute tokens or coins for free to their communities. Don't misquote it for IOS Airdrop, it has nothing to do with iPhone.
Airdrops are mostly dropped out of the total supply and increase the circulating supply of the particular coin.
A recent Airdrop: The ontology(ONT) airdrop distributed 20 million coins about 10% of its tokens, to neo holders. Both coins were created by the Chinese company OnChain. For every one neo, investors could get 0.2 ontology tokens(50% of which are freely tradable and the other 50% are automatically locked).
Why Developers are Airdropping free Coins/Token
Now you might be wondering, why are cryptocurrency projects airdropping coins for free instead of selling them? let’s find out.
Coin Developers have discovered a new way of promoting their new projects rather than spending money on Ads. Why spend millions on Ads when you can reach millions by airdropping free coin.
Who wouldn’t want to go for free?
2. Raising Awareness
Running an airdrop helps create awareness about its project, token sales or ICO. Airdrops don’t only create a big network of token holders but also motivates the community in getting things done like winning community votings for exchange listings. A lot of monetary interest is built once the token hits exchanges.
Developer may decide to use Airdrop as a way to drive up the price of an existing coin. The demand for that original cryptocurrency could go up as investors buy it just to be a part of an upcoming airdrop.
4. Mass Adoption
Do you know how to get my attention, just send some BTC into my wallet and I would be willing to listen to whatever you have to say Same applies to Airdrops; slip some token into their wallet and they will be willing to know more about your project and how it’s fairing.
“When you give something to someone for free they will pay a little more attention than if you ask them to sign up,”
said Erik Voorhees, CEO of ShapeShift
That being said, then Airdrops is definitely set to compete with ICO coupled with the fact that airdrops are less likely to be regulated. So get in that Airdrop now
A little secret: SEC are mostly attracted to those cold rooms where hard cash is involved, so there probably won’t be news like China officially banning Airdrops, U.S. Securities and Exchange Commission after some Airdrops. So Just keep calm and get some free Airdrops
Don’t forget to check Beginners Airdrop Guide