Airdrops are screwing up the cryptocurrency market

There is no such thing as free “money”

Why would anyone airdrop tokens?
Airdrops in the ICO niche market, is referred to the practice of sending a certain amount of digital assets to prospective users and investors for free.

It first started off with the disbursement of tokens into random Ethereum addresses. In theory, wallet owners would notice the free airdrops on their accounts, effectively creating awareness towards a new digital asset in the cryptocurrency eco-system.

However, this technique has not been delivering any tangible value for projects seeking funds in cryptocurrency, as it is difficult to assess the impact.

Today, the “new-gen” airdrops have become better structured and part of a more comprehensive investor acquisition strategy.

As such, token sale marketers expect contact details, especially e-mail addresses in exchange for airdrops.

Overall, airdrops can provide four theoretical value propositions:

Lead generation: gathering contact information is key to any marketing exercise, especially if prospects are “crypto-litterate”.
Viral marketing: most ICOs promote airdrops as “free money” — it will obviously convince many people to sign up to the sale and start referring their circle.
Trigger FOMO: as airdrops often occur only a few weeks before a sale launches, ICOs would typically offer handsome discounts, to convince investors that missed the airdrop.
Reward loyalty: airdrops could be an effective strategy to retain recurring users — unfortunately most of product that fundraised via ICOs do not have … users.