cRYPTO Glossary

An airdrop is a marketing campaign where a cryptocurrency or token project distributes free tokens to a specific audience.

Explanation:

• Purpose: Airdrops are used to promote a new cryptocurrency or token by distributing free tokens to existing holders of another cryptocurrency, participants in a community, or users who perform specific actions.
• Types: There are several types of airdrops, including standard airdrops where tokens are sent directly to participants' wallets, and bounty airdrops where users earn tokens by completing tasks or promoting the project.
• Marketing strategy: Airdrops help increase awareness, attract new users, and encourage engagement within the cryptocurrency community.
• Regulatory considerations: Projects must comply with legal regulations and ensure transparency regarding the distribution of tokens during airdrop campaigns.

Key Points for Beginners:

• Free distribution: Participants receive tokens without paying for them, although some airdrops may require specific actions to qualify.
• Community engagement: Airdrops incentivize community participation and can foster a supportive user base for new projects.
• Blockchain utility: Airdrops leverage blockchain technology to distribute tokens securely and transparently, often using smart contracts to automate distribution processes.