SEC S19-W1 || Crypto Opportunities: Airdrops and Giveaways
Hello Steemians, welcome to my post. I am excited to participate in this challenge which I have talked about "Airdrops and Giveaways | Oportunidades"
Explain what a cryptocurrency airdrop is and what its main objectives are. Give examples of projects that have used airdrops.
Canvas
A cryptocurrency airdrop is now becoming so popular in the crypto space which such a way that many crypto projects are now putting their airdrop on telegram after the successful launch of NOT coin which was built on the TON blockchain. Many who participated in the NOT coin airdrop received a good amount of money brought massive users to the current crypto airdrops on Telegram.
Every project has a way of attracting the interest of users in the crypto space, a cryptocurrency airdrop is seen as a marketing strategy that is used by crypto or blockchain start-ups to attract the interest of potential investors (users) by rewarding them with tokens or coins into their wallets. A user who participated in a crypto airdrop would be sent a small amount of the currency into his or her wallet in return for the services that the user offers to the crypto project or blockchain start-up.
| Objective of Crypto |
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The main objectives of a cryptocurrency airdrop are to create, spread awareness, and increase the ownership of the new cryptocurrency that will be launching into the crypto market. The more the ownership of the cryptocurrency is the more the value of the cryptocurrency will become.
Another main objective is to get more investors and traders that will be trading the cryptocurrency when it is listed on an exchange. Also, is to get people that can support the projects through initial coin offering (ICO) and fundraising. Today, getting to know airdrops is so easy as airdrops are mostly promoted on the company website, social media page, forum, etc the major problem that people face when it comes to airdrops is knowing the legit airdrops.
However, it is not everyone who participated in a cryptocurrency airdrop that does get qualifies to receive free cryptocurrency, because there are usually certain criteria that a participant must meet before receiving the free airdrop into his or her wallet. However, participants would have to perform certain tasks like posting about the currency on a social media platform, which is called farming, connecting with members of the blockchain network, writing a blog post, playing games, daily mining, or tapping.
| Example of projects that have used airdrops. |
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screenshot from Notcoin telegram airdrop
NOT coin in TON blockchain is the current example of a project that has used airdrop. It is a telegram play-to-earn project that connected a successful airdrop and distributed about 80 billion NOT tokens to its participants who met the requirements.
Uniswap (UNI) is another project that successfully used airdrop in the year 2020 to get the attention of users the project distributed (airdropped) 400 UNI tokens to all eligible users that make use of the platform before the deadline that was filed for the airdrop to end.
What is the difference between an airdrop and a giveaway in the field of cryptocurrencies? Explain with concrete examples, including similar initiatives with the Steem token.
An airdrop is different from giveaways in the field of cryptocurrencies which this post will be looking at in separate ways to have a clear understanding.
Airdrop
Airdrop means free cryptocurrency that is distributed into the wallets of participants of the project. It is usually sent to many wallets and in an airdrop, participants would have to take part in the tasks that are organized by the projects for some months, weeks, or days.
An example like the NOT coin that did and airdropped more than 80 billion NOT coins to participants some months ago is an example of the airdrop, more of you put your efforts into accumulating the token or coin. On the Steemit platform, there is no airdrop, but there are giveaway prizes whenever a user organizes a contest the giveaway prizes will then be shared with the top 3 winners of the contest.
Giveaway
To me, I will say that giveaway is a sort of random competition or lottery in which the winner who gets the prize is been awarded with the prize rewards for being the winner. For example, an engagement challenge contest or a contest that is organized by the community or a single user will allow everyone to take part because the task in the contest is easy, and the winner of the contest is randomly selected for the prize of the contest.
Here on the Steemit platform, the first Winer is usually rewarded with 5 or 3 STEEM and booming support, which if it is an engagement challenge contest the top 3 winners are rewarded with STEEM and SC01 upvotes.
Now based on what I have so far discussed above, we can see a clear difference between airdrop and giveaway in the field of cryptocurrencies. When it comes to airdrop everyone who participated in the airdrop will receive the same amount of token or coin that Mr A or Mr B receive as long they meet the requirements which means in the airdrop there is nothing like first, second, or third winners which in giveaway there is as people are randomly selected as winners like in the case of the steemit platform.
What are the advantages and disadvantages of airdrops for project developers and participants? Use cases involving the Steem token if possible.
Some of the advantages and disadvantages of airdrop for project developers and participants are shared below
Advantages:
Increased user adoption:
Airdrop is one of the easiest ways to get people to try a new crypto project before it is been launched without having to invest in the project which helps to increase user adoption.
Token distribution:
Airdrop helps project developers to distribute tokens or coins to widely people across the globe which also helps to increase the liquidity of the coin or token.
Marketing:
Airdrop is one of the best ways to market a crypto project and make the project known to people without airdrop would be difficult for someone to know about a certain project.
Enhanced community engagement:
Airdrop helps crypto projects and participants to enhance community since it requires users to join social media groups to complete tasks and get updates which can lead to an increase in community engagement.
Disadvantages:
Fraud:
Airdrop is capable of attracting scammers who will create fake social media accounts or bots to take advantage of the project that is doing airdrop and scam people.
Misaligned incentives:
Airdrop attracts people whose interest is to defraud the system or who are only interested in receiving free coins rather than contributing to the growth of the projects.
Cost:
Airdrop requires resources and time to plan before executing the projects which means there is usually a huge cost to run a crypto airdrop.
For Project Developers:
As for project developers, airdrop is a powerful tool for them to create awareness and build stronger communities before the launch of their project, tokens or coins which will then be distributed to participants. Also, project developers use airdrops to get more users to participate in their projects through the creation of a referral program.
Also, airdrop helps protect developers to gain more visibility and recognition in the highly competitive market. By giving participants free coins or tokens, project developers, generate the interest of potential investors to join or support their project.
Airdrop is also seen as a way of rewarding early adopters and supporters who are loyal to the project by offering them exclusive rewards. Both project developers and participants benefit from airdrop which for participants to gain free tokens or coins, whereas project developers gain recognition, and awareness that can bring potential investors.
What are the security and regulatory challenges related to cryptocurrency airdrops and giveaways? How can these challenges be managed?
Well, I hardly participate In crypto airdrops to protect my information based on how far I have studied airdrops, I can say that some of the security and regulatory challenges related to cryptocurrency airdrops and giveaways are:
Security law compliance:
Most airdrops don't follow the security laws of the countries that they are supposed to if the transaction is qualified as an investment asset or not and many airdrops don't follow the laws of security and exchange commission.
Consumer protection:
Every Airdrop is capable of attracting scammers some airdrops are created for fraudulent activities to steal or collect participants' coins or tokens which raises concerns about regulatory compliance and consumer protection.
Taxation:
In some countries, cryptocurrency is classified as property for tax, which also means airdrop should also be a task like every other asset, but there are no clear guidelines and valuation for the airdrop.
Propose a detailed plan to organize an airdrop using the Steem token. The plan should include eligibility criteria, required participant actions, implemented safety measures, and promotional strategies to maximize impact.
Let's say we want to want to organize an airdrop using the Steem token, our plans should be this way:
First is to define the objective of the project and our target audience.
Secondly, is for us to choose the right platform and distribution method for the Steem token.
Thirdly, is for us to set clear and fair criteria and rules for users' eligibility.
Fourthly, is for us to promote our airdrop effectively and ethically to the general public.
Eligibility Criteria, And Steps To Claim
For participants to be able to claim a Steem token, participants (users) will need to follow the comprehensive guide of the project steps. The process for eligibility will be, mandatory to know your customer (KYC) verification to stop duplicate accounts from receiving the airdrop.
Creating a cryptocurrency wallet for platforms where the Steem token will be sent. Users will have to connect their wallets to the platform where the airdrop is conducted or announced. By following all these necessary steps and instructions users would be able to claim their Steem token effectively without any issues.
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Currently popular means of earning currency is airdrop. Most of which are related through telegram. But its biggest disadvantage is fraud. Some provide phishing links in the name of Airdop. And the hacker doesn't steal your valuable information as soon as you get in there. So we must be aware. Before participating in any AirDope you should gather detailed information about that token.
Thank you very much for your valuable description. I wish you success in that competition.
In the crypto space, Airdrop is now what is trending as many projects are coming out. Thank you, sir.
A pleasure to read your entry friend @jasminemary. There is a very strong narrative with Telegram's "mini apps" that is reintroducing the issue of "airdrops."
An excellent way to capitalize our eir digital wallet by forming a small capital. I have an acquaintance who with the coins that were given to him in an "airdrop" won $2000, crazy. Good luck in the contest! Blessings.
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