Airdrop

Airdrop definition: The distribution of free cryptocurrencies or tokens to users, usually as part of a promotional event.

An airdrop is the free distribution of digital tokens to public wallets. In cryptocurrency, it refers to a method where digital tokens are given freely to selected wallet addresses on a blockchain, commonly seen on networks like Bitcoin and Ethereum.

Airdrops usually happen in two situations. First, they may occur when a project distributes free tokens to holders of an existing cryptocurrency. This strategy boosts the token’s spread and visibility, serving as an effective tool for marketing and user acquisition in the crypto space.

Second, airdrops can distribute new tokens after a blockchain undergoes a “fork.” In cryptocurrency, a fork is when a blockchain splits, creating two separate paths with different protocols. Airdropping tokens after a fork helps the new token gain a wider holder base.

A notable example is Uniswap’s distribution of UNI tokens. Uniswap, a decentralized exchange on Ethereum, allocated its new UNI tokens to every address that had interacted with its platform before a certain date, distributing 15% of the total UNI token supply.

In summary, an airdrop represents a method of token distribution within the cryptocurrency landscape. Airdrops serve various purposes, ranging from marketing initiatives and user rewards to the broad dissemination of tokens following a blockchain fork.