SEC S19-W1 || Crypto Opportunities: Airdrops and Giveaways

pixabayedited using my phone

When we receive surprises, we feel happy and delighted because we never expected them. In this context imagine receiving a surprise package filled with treasure, but instead of having a physical box to open, you've gotten a digital one to unlock digital fortunes! Welcome to the world of Cryptocurrency airdrops and giveaways, where the treasures gotten from these packages are real and the surprises are endless.

There are more to airdrops and giveaways than just being freebies; they're a way for projects to share widely their vision and create a wave around their innovate idea. And for us the receivers we use the opportunity to grow our portfolio and shape the future of finance. Let's learn more about Cryptocurrency airdrops and giveaways together

A Cryptocurrency AirDrop is a promotional event where a blockchain company project or cryptocurrency company distributes is certain amount of their official tokens or coins to a specific public market for free. Airdrops typically requires participants who are involved in receiving the tokens to complete specific tax such as; joining the telegram or discord channels, providing a wallet address to receive the tokens when airdropping begins, following the projects or company social media accounts and even sharing the post or tweet about the project on your social media handle such as Twitter, Facebook, Instagram and LinkedIn.

Airdrops can be classified into different types including:

1. Coin AirDrop: Free tokens are distributed to participants without paying a dime.
2. Token airdrops: Free tokens are as well distributed to participants without paying for it.
3. NFT (Non Fungible Token) airdrops: These are unique digital assets who are distributed to participants for free as well.
4. Bounty airdrops: this type of AirDrop required participant to complete second tax to be able to receive or earn rewards.
5. Exclusive AirDrop: limited to a specific community or audience.

The main objective of airdrops are:

1. Community building: to create a massive community of supporters and devotees around the project from the beginning to any part of the project anywhere in the future.
2. Visibility and awareness: To increase awareness and visibility to the public digital Market about the token or coin.
3. Adoption and use: To encourage people to try new cryptocurrencies as to increase the adoption and usage of their token.
4. Rewards loyal followers, supporters, early adopters and participants.
5. Increase brand recognition.

Here are some examples or blockchain projects that have used airdrops activities:

• Notcoin (NOT)
• Uniswap (UNI)
• Aributrum (ARB)
• Stellar (XLM)

Above are examples of cryptocurrency project that used airdrops and they are more but I'll been mentioning the first two and give a brief explanation about them.

1. Notcoin (NOT)

screenshot of the Notcoin airdrop bot on telegram

Notcoin was a popular "tap to earn" game that was first introduced in November 2023, followed by its official launch on January 1st 2024. It was built on the telegram as a telegram app. Participants had to tap their screens to earn the NOT tokens. The claim of AirDrop ended on May 14 and two days later the Notcoin project was listed on many exchanges. Under 36 hours of listing, Notcoin hit the market trading volume of,$743 million.

1. Uniswap (UNI)

screenshot of the uni app icon from my phone

In 2020, the Uniswap exchange was launched and an AirDrop that was announced which was that, the first set of people to use the platform prior to September 1st 2020, will have a minimum of 400 UNI tokens to claimed. And on September 16th 2020 the Uniswap official coin/token was listed and the rewarded users who claimed the airdrops were able to trade theirs and get money.

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In the home of cryptocurrencies, both airdrops and giveawayd involve receiving free tokens or coins, but there are key differences that differentiates the two from each other:

To provide a concrete examples which illustrate the difference between airdrops and giveaway using the steem tokens and initiatives. Here is it.

Other similar initiatives with the official steemit tokens (steem)

• Steem Faucet: An event where users with small amount of steem powers will be rewarded for reaching a milestone, such as becoming a dolphin
• Steemit Community Challenge: which is currently ongoing, where users are gifted with tokens into their wallet for active participation and engagement in the community such as the Steemit Engagement Challenge (SEC)

Advantages of airdrops for project developers are:

• Increased awareness and visibility for the project
• Increased adoption and usage
• Generates buzz and excitement
• Encouraging community supporters and early adopters

Disadvantages of airdrops for project developers

• It can be very costly to fund
• may attract users who are only interested in free things rather than supporters and investors
• It can lead to decreased value of the token and dilution
• Requires strong planning and execution strength

Advantages for participants

• Receives free tokens probably valuable.
• Discovering of new and innovative projects
• Enhancing engagement and participation with the project

Disadvantages for participants

• May need much efforts and task to qualify for airdropping
• tokens may fall less of value
• May result in fake project, scam, unrealistic hype and expectations.

Using cases involving the Steem tokens, here are some of my views of possible events that may tary:

• Steem-based projects like Steemit have used contests and community engagement events to rewards users and promote the community. The developers have been gaining through the engagement, upvotes and comments. Users also have received rewards too.
• If there should be a Steemit Newcomers' Airdrop or just Steemit Airdrop, where users complete tasks and prizes. The project developers will be advantaged to the community growth and the users will be advantaged to receive steem tokens.

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Below are some security and regulatory challenges related to cryptocurrency airdrops and giveaways. They includes:

Security challenges

• Phishing Scams: fraudulent giveaways or airdrops aim to steal personal information from users who participate in them which can lead to emptying their crypto wallets.
• Smart contracts vulnerability: Coded contract that are weak can be exploited, which can therefore compromise the security of the tokens.
• Wallet security: Participants may use inbuilt wallets that may be insecure and exposed their tokens to theft.

Regulatory challenges

1. Anti-money laundering (AML) and Know Your Customer,(KYC) verification requirements: airdrops and giveaway may need to use and comply with KYC/AML regulations for the security of their community
2. Taxation: participants may face tax liabilities on collected tokens.
3. Legal grouping: Airdrops and giveawayd may be grouped as securities, subduing them to rigid regulations.

To manage the above challenges in a good way, here are tips:

1. Make thorough research and due effort on the project and it's sole team.
2. Ensure that the Smart contracts are well secured and fully audited.
3. Use recommendable and secured wallet to save your tokens.
4. Comply with the set/applicable rules, laws and regulations.
5. Apply KYC/AML operation
6. Make use of secured distribution methodsike cryptographic sorting
7. Examine and address potential security sensitivity.
8. Create clear communication channels for participants.
9. Partner with regulatory bodies and legal specialists to assure adherence.

Here is an explained plan to organise an airdrop for the steem token using the steem related platform called STEEMIT.

Name of Airdrop: Steemit Growth Airdrop

Eligibility Criteria:

• Participants must have a Steemit account
• Participants must have a minimum of 50 Steem Power
• Participants must have a record of 30 comments, 100 upvotes and good Voting CSI for the last 30 days.

Required participants actions:

• Follow the official account of the Steemit team (@steemitblog) and other top Steemit users such as steemcurator01, steemcurator02 and others with significant amounts of Steem power.
• Give a detailed comment on the announcement post and give a brief introduction of yourself and why you're interested in the Airdrop campaign.
• Share a post of the event on their social media handles

Safety Measures

1. Make use of a Merkle tree distribution method to assure a secured and simple token allocation
2. Implement a CAPTCHA system to prevent spam from bots.
3. Monitor interactions between participants and flag activities that are suspicious.

Promotional schemes:

1. Announcement of the Airdrop on social media platforms.
2. Collaboration with Steem influencers and community leaders to promote the Airdrop event.
3. Create appealing contents highlighting the benefits and features of the Airdrop
4. Host a live AMA (Ask Me Anything) session on Steemit and twitter to answer questions from participants.
5. Offer bonuses for top referrals.

Airdrop detail:

1. Total amount of Steem tokens to be distributed: 100,000
2. Individual allocation: based on tasks completed, and referrals.
3. Airdrop duration: 4 weeks
4. Distribution method: Merkle tree

Timeline:

1. Official Airdrop announcement: Day 1
2. Open participants: Days 2 - 28
3. Airdrop distribution: Days 28 - 35
4. Post Airdrop assessment and feedback collation.

In conclusion, cryptocurrency airdrops and giveaways can be a very powerful tool for project managers to promote their project and give our rewards to their community and as well increase adoption. However, they also come with security and regulatory objectives that need to be addressed in the right way. Bg also understanding the advantages and disadvantages of Airdrops to project developers and the participants, projects can maximise the effect of their Airdrop and build a stronger and engaged community.

Thanks for reading...

I invite @bossj23, @kidi40 and @bettymikki to participate.