Airdrop is an event where crypto coins, tokens or NFTs (Non-Fungible Tokens) are distributed to digital wallet addresses, often for free or as rewards. In essence, airdrops serve for promotional goals in the overhyped crypto world and have potential for massive profits.
Airdrops also carry potential risks like phishing, scams and price impact which can lead to serious losses for unexperienced users.
Key Terms
- Crypto Coins/Tokens: Digital assets that use encryption to secure transactions.
- NFTs (Non-Fungible Tokens): Unique digital assets representing ownership of a specific item or piece of content on the blockchain.
- Digital Wallet Address: An alphanumeric identifier that represents a destination for a cryptocurrency payment.
Benefits
- Free Assets: Users can receive new tokens/coins/NFTs without any cost. This can lead to serious profits depending on the asset future.
- Market Awareness: Helps in promoting and increasing awareness about new cryptocurrencies/NFT projects.
Drawbacks
- Scam Risks: Fake Airdrops may trick users into revealing sensitive information like account credentials.
- Price Impact: Sudden influx of free tokens might affect market prices negatively due to oversupply.
