What Is A Crypto Airdrop? Read Our Detailed Guide

Updater face
Last updated Jun 11, 2024 | 04:50 PM UTC

Crypto airdrops distribute free cryptocurrency tokens to users' wallets, who support the project at its pre-launch or pre-sale phase. This promotional strategy helps new blockchain projects attract attention and grow their user base. Projects might reward users for specific actions or simply for holding a certain token.

Crypto airdrops serve multiple purposes. They increase token circulation, enhance community engagement, and create buzz around the project. For users, airdrops offer free tokens, which could increase in value if the project succeeds.

Key takeaways

  • Crypto airdrops are distributions of tokens to a large number of wallet addresses, typically for free, as a promotional tool or reward for community engagement. 
  • Airdrops are often a key strategy for attracting users to a new project during the pre-sale or pre-launch period. 
  • There are generally four types of airdrops: token airdrop, coin airdrop, bounty airdrop, and holder airdrop. 
  • Airdrops have been a key target for hackers and hackers to steal substantial funds over the years. 
  • Users should always confirm the legitimacy of an airdrop by assessing the project, its developers, and the community before sharing their wallet details.

Types of airdrops

Crypto airdrops come in various forms, each serving different purposes and targeting different user groups. Understanding these types can help users maximize their participation and benefits.

Token airdrop vs coin airdrop

Tokens and coins are often used interchangeably, but they have distinct differences. Coins operate on their own blockchains (e.g., Bitcoin, Ethereum), while tokens are built on existing blockchains (e.g., ERC-20 tokens on Ethereum).

  • Token airdrop: Projects distribute tokens to users as part of promotional activities. For instance, many DeFi projects issue governance tokens to incentivize users to participate in their ecosystems.
  • Coin airdrop: Involves distributing coins from newly launched blockchains. These are less common but can occur during hard forks or the launch of new networks.

What are bounty airdrops?

Bounty airdrops reward users for completing specific tasks. These tasks typically include social media activities like sharing posts, joining Telegram groups, or referring friends. By performing these tasks, users help promote the project and, in return, receive tokens.

Bounty airdrops benefit both parties. Users earn free tokens, while projects gain increased visibility and engagement. This method is highly effective for early-stage projects seeking rapid community growth.

What are holder airdrops?

Holder airdrops target users who already hold a certain cryptocurrency. The project takes a snapshot of wallets holding the specified cryptocurrency and distributes tokens accordingly. This method rewards loyal users and encourages holding rather than trading.

A notable example is the Stellar (XLM) airdrop, where holders of Bitcoin and Ethereum received free XLM tokens. This type of airdrop strengthens community bonds and rewards long-term investors.

Wallet set up for receiving airdropped tokens/coins

Setting up a secure wallet is crucial for receiving airdropped tokens. Here are the steps:

  1. Choose the right wallet: Ensure the wallet supports the blockchain of the airdrop. Popular choices include MetaMask for Ethereum-based tokens and Trust Wallet for multiple blockchains.
  2. Install and set up: Download the wallet from a trusted source, create a new wallet, and securely store the seed phrase. Never share your seed phrase with anyone.
  3. Add custom tokens: Sometimes, airdropped tokens won't automatically appear. You'll need to manually add them using the token's contract address, which can be found on the project’s official channels.
  4. Stay informed: Join the project's official social media channels for updates on the airdrop and any necessary steps to claim your tokens.

Notable crypto airdrops in 2024

In 2024, several notable crypto airdrops have occurred, capturing significant attention in the crypto community. Here are some of the most popular ones:

  • Arbitrum (ARB): This layer-2 scaling solution for Ethereum completed a major airdrop in March 2024. The project distributed 1.162 billion ARB tokens to early adopters, valuing the airdrop at over $1.3billion at its initial listing price​.
  • Blur (BLUR): An NFT marketplace geared towards professional traders, Blur has been conducting ongoing airdrops. The latest airdrop season, which ended in May 2024, rewarded users for various activities such as bidding, lending, and listing NFTs. This ongoing campaign has made Blur one of the most consistent and lucrative airdrops of 2024​​.
  • Manta Network (MANTA): Manta Network, a privacy-preserving blockchain, initiated its airdrop program early in 2024, distributing tokens to users participating in its ecosystem. This airdrop aimed to bolster user engagement and expand the network's visibility​.
  • Starknet (STRK): As a layer-2 scaling solution for Ethereum, Starknet conducted an airdrop targeting early users and developers. This airdrop, which began in February 2024, distributed 700 million tokens to nearly 1.3 million eligible wallets​.
  • Smog (SMOG): A new multi-chain memecoin operating on the Solana blockchain, Smog recently completed a fair launch campaign. The project rewarded participants with free tokens for engaging in basic promotional tasks. This campaign quickly made Smog popular due to its high scalability and low fees​​.
  • CEX.io (USDT): This popular crypto exchange conducted an airdrop campaign worth over 40,000 USDT. Users participating in trading competitions and initial trades on the platform’s Spot Trading option were eligible for various rewards, enhancing CEX.io's user base and trading activity​​.

How to claim and receive airdropped tokens/coins

Claiming and receiving airdropped tokens or coins involves several steps, ensuring you meet eligibility criteria and follow the correct procedures. Here's a detailed guide to help you navigate this process.

1. Stay informed about airdrop opportunities
To participate in airdrops, you must first know about them. Follow these steps to stay updated:

  • Join crypto communities: Engage with crypto communities on platforms like Telegram, Reddit, and Discord. Many projects announce airdrops in these groups.
  • Follow social media channels: Follow the official Twitter and Facebook accounts of blockchain projects. They often announce airdrops on these platforms.
  • Use airdrop aggregators: Websites like Airdrops.io and CoinMarketCap's airdrop page aggregate ongoing and upcoming airdrops. Regularly check these sites for new opportunities.

2. Meet eligibility criteria
Different airdrops have different eligibility requirements. Common criteria include:

  • Holding specific tokens: Some airdrops require you to hold a particular cryptocurrency at a specified snapshot time. Ensure your wallet contains the necessary tokens before the snapshot date.
  • Completing tasks: Bounty airdrops often require participants to complete tasks such as following social media accounts, sharing posts, or joining discussion groups.
  • Being an active user: For some airdrops, you must have interacted with a project's platform, such as making transactions or staking tokens.

3. Prepare your wallet
Ensure your wallet is ready to receive the airdropped tokens:

  • Choose a compatible wallet: Use a wallet that supports the blockchain on which the airdrop is occurring. For Ethereum-based tokens, MetaMask or MyEtherWallet are popular choices.
  • Secure your wallet: Store your seed phrase securely. Never share it with anyone. Consider using a hardware wallet for added security.
  • Add custom tokens: If the airdropped token doesn't appear automatically, add it manually by entering the token's contract address, symbol, and decimals.

4. Claim the airdrop
Claiming airdrops can vary depending on the project's requirements. Here are the common methods:

  • Automatic distribution: Some airdrops distribute tokens automatically to eligible wallets. You don't need to take any action if your wallet qualifies.
  • Manual claim: For other airdrops, you must claim tokens manually. This typically involves:
  • Visiting the official airdrop page: Navigate to the project's official airdrop claim page. Ensure the URL is correct to avoid phishing scams.
  • Connecting your wallet: Connect your wallet to the airdrop page. Verify the site's authenticity before connecting.
  • Completing verification steps: Follow any additional steps required, such as verifying your email or completing CAPTCHAs.
  • Claiming your tokens: Once verified, click the claim button to receive your tokens. They should appear in your wallet shortly after.

5. Verify receipt of tokens
After claiming, verify that the tokens have been credited to your wallet:

  • Check your wallet: Open your wallet and check the balance. If the tokens don't appear, you may need to add them manually using the contract address.
  • Use block explorers: Tools like Etherscan for Ethereum can help verify transactions and ensure the tokens are transferred to your wallet.

6. Stay vigilant for scams
Always exercise caution to avoid falling victim to scams:

  • Double-check URLs: Always ensure you are on the official website before entering any personal information or connecting your wallet.
  • Beware of phishing attempts: Scammers often create fake airdrop sites to steal your credentials. Only follow links from trusted sources.
  • Never share private keys: Legitimate airdrops will never ask for your private keys or seed phrases. If a site requests this information, it's a scam.

Security considerations for airdrops

Participating in crypto airdrops can be rewarding but also exposes users to various security risks. To protect your assets and personal information, follow these essential security practices.

1. Avoid phishing scams
Phishing scams are common in the crypto space. Scammers create fake websites or emails that mimic legitimate projects to steal your credentials.

  • Verify URLs: Always double-check the URL of the airdrop site. Look for subtle differences like typos or additional characters.
  • Official channels: Only follow links from the project's official website or verified social media accounts.
  • Browser security: Use browser extensions like MetaMask, which can warn you about potential phishing sites.

2. Secure your wallet
Your wallet is your primary interface for interacting with airdrops. Securing it is crucial to prevent unauthorized access.

  • Use hardware wallets: Hardware wallets like Ledger or Trezor offer enhanced security by keeping your private keys offline.
  • Enable two-factor authentication (2FA): If your wallet supports 2FA, enable it to add an extra layer of security.
  • Regular backups: Regularly back up your wallet's seed phrase and store it securely offline.

3. Avoid sharing private keys
No legitimate airdrop will ever ask for your private keys or seed phrases.

  • Private keys: Keep your private keys secret and never share them online.
  • Seed phrases: Store your seed phrases securely offline. Use a hardware wallet to keep them safe.

4. Double-check airdrop requirements
Some airdrops may ask for specific actions that could be a vector for scams.

  • Verify actions: Only perform tasks that are clearly outlined on the project's official channels.
  • Beware of upfront payments: Be cautious of airdrops that ask for any form of payment or deposit. Legitimate airdrops are free.

5. Monitor for suspicious activity
Regularly check your wallet for any unauthorized transactions or activities.

  • Transaction alerts: Set up alerts for transactions on your wallet to monitor for any unauthorized activity.
  • Regular checks: Regularly review your transaction history to ensure all activities are legitimate.

Tax implications of airdrops

Receiving airdropped tokens can have tax implications. Understanding these obligations helps you stay compliant with tax laws and avoid penalties.

Airdrops as income

In many jurisdictions, airdropped tokens are considered income and are taxed at their fair market value when received.

  • Taxable event: The receipt of airdropped tokens is a taxable event. You must report the value of the tokens as income on the date you receive them.
  • Fair market value: Determine the fair market value of the tokens in your local currency on the date of receipt.

Capital gains tax on crypto airdrops

You may incur capital gains tax (CGT) if you sell, trade, or otherwise dispose of airdropped tokens.

  • Holding period: The holding period begins on the day you receive the tokens. If you hold the tokens for more than a year, you may qualify for long-term capital gains tax, which is usually lower than short-term rates.
  • Calculating gains: Calculate your capital gains by subtracting the cost basis (the value of the tokens when received) from the sale price.

Reporting airdrops for tax purposes

Properly report airdropped tokens on your tax return to ensure compliance.

  • Income reporting: Include the value of airdropped tokens as other income on your tax return.
  • Capital gains reporting: Report any capital gains or losses from the sale of airdropped tokens.

International variations

Tax treatment of airdrops can vary significantly between countries.

  • Local laws: Consult local tax laws or a tax professional to understand how airdrops are taxed in your country.
  • Double taxation: Be aware of double taxation treaties if you are subject to taxes in multiple jurisdictions.

It’s also important to maintain detailed records of all airdrop-related transactions for tax purposes. Keep a log of all airdropped tokens received, including dates, amounts, and values. Retain any receipts or statements that can help verify your transactions and valuations.

Risks and scams associated with airdrops

Fake airdrop claim websites 

Scammers create websites that closely mimic legitimate airdrop claim sites. For example, during the Celestia airdrop, multiple fake claim sites emerged, tricking users into connecting their wallets or providing their seed phrases, leading to the theft of their crypto assets.

Phishing scams 

In 2023, phishing scams led to significant losses, with wallet drainers stealing around $295 million from 324,000 victims. Scammers often hack official Discord or Twitter accounts of crypto projects to spread phishing links, directing users to fake airdrop sites where their assets are subsequently stolen​​.

Impersonation of popular accounts 

Fraudsters create fake profiles resembling real projects or well-known personalities in the crypto space. These fake accounts announce bogus airdrops, prompting users to share their wallet details or connect to malicious sites. For instance, a scam during the Celestia TIA token airdrop involved a fake account that closely imitated the official one, leading many to fall for the scam​.

Fake tokens and NFTs 

Scammers send fake tokens or NFTs to users' wallets, with instructions on how to claim supposed rewards. These fake assets often have names similar to real projects, tricking users into interacting with them and compromising their wallets​.

Monkey Drainer and Inferno Drainer 

These notorious phishing gangs have been responsible for significant crypto thefts. Before shutting down in 2023, Monkey Drainer stole approximately $16 million in digital assets, while Inferno Drainer stole about $81 million. These groups used sophisticated phishing techniques to trick users into revealing their private keys or connecting their wallets to malicious sites​.

How to spot a fake airdrop

Spotting a fake airdrop requires vigilance and a keen eye for details. Scammers frequently exploit the popularity of airdrops to trick users into divulging private information or stealing their assets. Here’s a detailed guide to help you identify and avoid fake airdrops.

1. Verify the source
The first step in identifying a fake airdrop is to verify its source.

  • Official announcements: Check if the airdrop is announced on the project’s official website and social media channels. Scammers often create fake profiles that look very similar to legitimate ones. Always double-check URLs and social media handles.
  • Reputable aggregators: Use reputable airdrop aggregators like Airdrops.io or CoinMarketCap’s airdrop page. These platforms typically verify airdrops before listing them.

2. Check the website URL or Twitter handle
Scammers create fake websites with URLs that closely mimic official sites.

  • Subtle differences: Look for subtle differences in the URL or social media handles. Scammers might add extra characters, change a letter, or use a different domain extension.
  • Secure connection: Ensure the website uses HTTPS, indicating a secure connection. While not foolproof, the absence of HTTPS is a red flag.

3. Analyze the communication
Communication about the airdrop can provide clues about its legitimacy.

  • Language and grammar: Poor grammar, spelling mistakes, and awkward language can indicate a scam. Legitimate projects usually maintain professional communication.
  • Urgency and pressure: Be wary of messages that create a sense of urgency or pressure you to act quickly. Scammers often use this tactic to make you act without thinking.

4. Investigate the team
Research the team behind the project.

  • Team members: Check if the team members are real and have a verifiable online presence. Scammers often use fake or stolen identities.
  • Project history: Look into the project’s history. Legitimate projects typically have a track record and a community presence.

5. Review the airdrop requirements
Legitimate airdrops have clear and reasonable requirements.

  • No upfront payments: Be cautious if the airdrop requires you to send money or tokens upfront. Genuine airdrops are free.
  • Task requirements: While some tasks like joining social media groups are normal, be wary of tasks that ask for too much personal information or access to your wallet.

6. Use blockchain explorers
Verify the token details using blockchain explorers like Etherscan for Ethereum-based tokens.

  • Contract address: Ensure the token contract address matches the one provided by the official project. Scammers often create fake tokens with similar names.
  • Token activity: Check the transaction history and token distribution. A legitimate token will have a consistent transaction pattern and distribution among multiple users.

7. Be cautious of unexpected tokens
Receiving unexpected tokens in your wallet can be a phishing attempt.

  • Ignore suspicious tokens: Do not interact with tokens that appear unexpectedly. Scammers often use these tokens to lure you into visiting phishing sites or connecting your wallet to malicious platforms.

8. Use security tools
Employ security tools to protect your interactions.

  • Browser extensions: Use browser extensions like MetaMask or EAL (EtherAddressLookup) that provide warnings about phishing sites.
  • Antivirus and anti-phishing software: Keep your antivirus and anti-phishing software up to date to help detect and block malicious sites.

By following these guidelines, you can significantly reduce the risk of falling victim to fake airdrops. Always stay cautious and do thorough research before participating in any airdrop.

Final thoughts

Crypto airdrops offer a unique opportunity for users to acquire free tokens and for projects to boost their visibility and user engagement. Understanding the different types of airdrops, setting up a secure wallet, and knowing how to claim and receive tokens are crucial steps to make the most of these opportunities.

Security is critical when participating in airdrops. Stay vigilant against phishing scams, verify the legitimacy of the sources, and never share your private keys or seed phrases. Additionally, be aware of the tax implications associated with receiving and selling airdropped tokens. Properly report your income and capital gains to stay compliant with local tax laws.

By following these guidelines and staying informed, you can safely participate in crypto airdrops and potentially benefit from the growth of new blockchain projects. Always exercise caution, perform due diligence, and engage with the crypto community to stay updated on the latest airdrop opportunities.

Frequently Asked Questions

What is a crypto airdrop?

A crypto airdrop is a distribution of free cryptocurrency tokens to users' wallets by blockchain projects. This promotional strategy aims to increase awareness, user engagement, and token circulation. Projects often use airdrops to reward early adopters, holders of specific tokens, or participants who complete certain tasks. Airdrops help projects gain traction and attract a broader audience without requiring users to invest their own money.

How can I participate in crypto airdrops?

To participate in crypto airdrops, follow these steps:

  • Stay informed: Follow official project websites, social media channels, and join crypto communities on platforms like Telegram, Reddit, and Discord. Reputable airdrop aggregators like Airdrops.io and CoinMarketCap’s airdrop page can also provide information on ongoing and upcoming airdrops.
  • Meet eligibility requirements: Each airdrop has specific criteria, such as holding certain tokens, completing tasks (e.g., social media activities), or being an active user of a platform. Ensure you meet these requirements to qualify.
  • Set up a compatible wallet: Use a wallet that supports the blockchain of the airdrop. Popular choices include MetaMask for Ethereum-based tokens and Trust Wallet for multiple blockchains. Secure your wallet by keeping your seed phrase safe.
  • Claim tokens: Depending on the airdrop, you might need to manually claim tokens by visiting the project’s official airdrop page, connecting your wallet, and following the provided instructions. Some airdrops distribute tokens automatically.

How many different types of altcoins are there?

There are thousands of different types of altcoins, each with its own unique characteristics and purposes. As of now, there are over 13,000 cryptocurrencies listed on various exchanges, with new altcoins being developed and launched regularly. These altcoins can be categorized into several types, including stablecoins, utility tokens, security tokens, and governance tokens, among others.

Where can I find legitimate crypto airdrop opportunities?

You can find legitimate crypto airdrop opportunities through several reliable sources:

  • Airdrop aggregators: Websites like Airdrops.io and CoinMarketCap’s airdrop page list verified airdrops. Regularly check these platforms for new opportunities.
  • Official project channels: Follow the official websites and social media channels (Twitter, Facebook, Telegram) of blockchain projects. Legitimate airdrops are often announced through these channels.
  • Crypto communities: Engage with crypto communities on Reddit, Discord, and Telegram. Community members often share information about upcoming airdrops and how to participate.


Written by

Mohammad is an experienced crypto writer with a specialisation in cybersecurity. He covers a wide variety of topics spanning everything from blockchain and Web3 to the retail crypto space. He has also worked for several start-ups and ICOs, gaining insight into the mindset and motivation of the founders behind the projects.