Airdrops: 5 Reasons to Think Twice Before Claiming Tokens

Airdrops may be a good way to enter the crypto world for free, but still need some awareness.

More and more ICOs are luring in a community through airdrops - a democratic distribution of tokens, ensuring that a wide community has at least some skin in the game when it comes to supporting an early-stage project.

Curiously, airdrop and airdrops are terms that are still more widely searched, while searches for "Bitcoin" have fallen by as much as 80%. Yet not all airdrops are made equal.

Here are the five things to consider before going in for an airdrop:

Past Airdrops: While it would be appealing to receive some of the hot new tokens for free, the truth is, the airdrops for those are long past. Assets like OmiseGo, Stellar, BAT, Golem sometimes see announcements for fake airdrops. Usually, those are attempts to steal wallet private keys. So if you see an invitation for an airdrop of an already widely traded token, best check with the official social media of the project.

Consider Privacy: Some airdrops require the sharing of a few online identities plus a blockchain address. In theory, the address is forever linked with a person. Sending and receiving from that address also taints other addresses. The small reward of an airdrop may have higher costs along the way.

Beware Gas Expenses: Sometimes, an airdrop does not come free. Some smart contracts are set up to extract gas for the project, and may in fact cost you precious Ethereum. In general, if a project requires a high gas cost, consider it a red flag. Asking for donations is also a red flag.

Consider Time Wasted: For some airdrops, the coins never arrive. Or, they are a token that has no value and no way of trading. While in the past ICOs have given away valuable assets, now some projects don't even bother to send the tokens. So filling out all the forms may be a waste of time. For some projects, the referral program is also fake, further wasting time.

Consider Cyber Security: Never provide private keys. And if an airdrop asks for a download, better pass it up. Airdrops are ideal for attempted phishing scams, so it's best to stay away. Some projects have proprietary wallets, which may be accessible, or come with other ways to steal credentials. In general, the crypto community has been aware there are too many scam airdrops to be counted.

If you really want a chance at an airdrop, consider big, legitimate projects and the ones that are also supported by big exchanges. Airdrops usually require owning Ethereum, or another asset from a network such as NEO. In that case, it is much safer to hold the assets.

Always double-check a project's credentials and true airdrop dates, there are copycats all around. Projects both older and brand-new are being copied every day.

The other way to get coins is through bounty programs, where there are more ways to do due diligence on the project and a good bounty program also speaks of the seriousness of the startup.