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Crypto airdrop season: Why people are making thousands for ‘free’

Crypto airdrop season: Why people are making thousands for 'free'
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The spirit woke up on Christmas Day and it was a pleasant surprise. It wasn’t an unexpected gift in his Christmas inventory, but rather an unexpected alert on his phone. New cryptocurrency was launched, and he was eligible to claim some for free.

It sounds like a scam, no more complicated than an email from an alleged Nigerian prince. But it wasn’t. Soul, an amusement trader in his thirties who has not revealed his real name, hit a “claim” and paid a transaction fee and watched $2,000 worth of tokens pouring into his wallet.

In the bewildering world of cryptocurrencies, this is called an airdrop. It’s not as rare as you might think.

Many traditional companies raise money by offering their shares to the public and offering shares to the public. organizations working in Web3The Internet, built into the blockchain, is going a similar path by releasing a token that people can buy and sell on exchanges. Some of these symbolic launches are accompanied by airdrops. If you have used the tool provided by the Web3 Foundation, you will get a bunch of tokens dropped into your wallet. Imagine if Adobe went public and, to raise awareness, sent 100 shares to anyone who used Photoshop in the past 12 months.

“Airdrops can be thought of as customer acquisition costs,” said Alex Gedevani of research firm Delphi Digital. Its benefit is twofold. First, they act as marketing. Nothing attracts attention like the prospect of getting free money. Second, it has become etiquette for blockchain applications to airdrop when they list a token. Therefore, punters are experimenting with new apps knowing that if the app is successful, there will likely be a profitable airdrop in the future.

Soul, who has been trading as a hobby since 2020, said, “Web3 has really impressed me. Airdrops motivate you to immerse yourself in it all.”

The company behind the Christmas Day airdrop is called OpenDAO. Anyone who has bought or sold on OpenSea, the largest NFT marketplace, can claim OpenDAO$SOS tokens. As of January 12, about 300,000 wallets have announced airdrops. (Unusually for airdrops, OpenDAO is not officially associated with OpenSea. The purpose of OpenDAO is to support traders in ways that OpenSea doesn’t – but that’s a whole other story.)

The more money people spent on OpenSea, the more airdrops they were eligible to receive. Anyone who claims an airdrop will see a Spotify wrapped infographic They detail their NFT trading data from 2021. Soul spent $25,000 on NFTs via OpenSea, placing him in the top 6%.

Airdrops received from the highest 1% limit on outrageous. Crypto Whales posted their infographic on Twitter, boasting an airdrop worth tens of thousands of dollars. Many traders have bought so many NFTs, spending so much on exorbitant Ethereum transaction fees, that they have been able to claim $140,000 in SOS.

OpenDAO has become a hot new token, with $650 million of SOS trading on December 26. It now has a market capitalization of $312 million, has been listed on several major exchanges and is among the largest DAOs in the market. (DAOs Hmm decentralized autonomous organizations, which works by issuing tokens that double as voting rights — and token owners then vote on how the DAO treasury is spent.)

If there is one thing that can be counted on in cryptocurrencies, it is that success is immediately imitated by others. OpenDAO has garnered a great deal of attention, and since then the airdrops have been pouring in.

the drops come

Airdrops are not anomalies, but usually spread over a period of months. Before Christmas, the last big event came in November with the Ethereum Name Service, a tool that allows people to change their wallet number to a wallet name, like Daniel.eth. But since Christmas, there has been a wave of airdrops that have sought to mimic the success of OpenDAO. The first was GasDAO, where tokens were dropped to traders based on the amount they spent on Ethereum transaction fees. The value of Soul’s airdrop was $1,300. Others got much more than that.

“How I Earned Over $250,000 in the NFT Space in December, An Analysis of Unique Opportunities in the Field,” prolific merchant tweeted. “I demanded $SOS and $GAS.”

On Monday, January 10, Looks Rare followed suit. It’s an NFT marketplace that hopes to compete with OpenSea, and has released an airdrop to raise awareness. Anyone who bought or sold NFT in 2021 can claim $LOOKS tokens if They listed NFT on the Looks Rare platform. The lowest denomination of airdrops was worth $400, although the most active traders received much more.

Then, on Thursday, January 13, came charge.wtf, an analytics tool that shows traders how much money they’ve spent on transaction fees. airdrop is designed to make noise an analytics dashboard tool that will be launching a fee. wtf soon.

However, not all airdrops are created equal. The intended purpose is to get people not to sell their tokens, but to keep them and buy more. Some tokens become more valuable over time, while others fade into obscurity. Looks Rare tokens have doubled in value since Monday’s airdrops, while GAS tokens held their dollar value for a few days before most airdrops became worthless.

“After the success of OpenDAO, many people copied,” the creator of OpenDAO 9x9x9 told me. “But they are using the success of OpenDAO to raise money for themselves.”

9x9x9, who declined to be named, says airdrops are often used to enrich founders. The team will keep the tokens for themselves, launch an airdrop to create noise and then sell the reserved tokens at the highest price. He didn’t mention the airdrops he was referring to, but he bragged that OpenDao is a passionate project and that no tokens were reserved for the team.

As always in cryptocurrencies, there are risks and scams. Caused a defect in the fee smart contract. tf in the token price crash in less than an hour, a disaster for early adopters. The allure of free tokens is strong, and shady developers can take advantage of this by creating dodgy smart contracts that can drain money from wallets claiming airdrop.

“I always inquire about any form of free money being received in cryptocurrency,” said Delvani Gedevani. “Airdrops coming from audience-facing teams are easily identifiable as legitimate, but there have been a few in the past with malicious intent, mostly from unknown sources, resulting in users’ money lost.”

The spirit is ambivalent about risk, instead eager to keep the money flowing. “These airdrops make me want to buy every new gadget.”

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