Crypto airdrops are a marketing strategy like giveaways that help the adoption of tokens and NFTs. Social media users get free assets for joining a list, holding tokens, or completing tasks, depending on the airdrop type. They often have user and time limits.
Launching a crypto project isn’t easy. Anyone can list an NFT or create a token. But how do you make it stand out?
With thousands of tokens out there, having better features isn’t enough. You need enough people to test how valuable it is in the market. But here comes the catch-22:
Creators need users to create demand, but no one wants a project that has no users in the first place.
Crypto airdrops help creators get those initial followers by giving away free tokens. Users just share their wallets on social media, follow the steps, and on the air-drop day, the creator sends tokens to those addresses. If you type “airdrop” on any social media, you’ll find an endless list of crypto and NFT airdrops.
They’re popular because they work:
Airdrops are opportunities for users to support a new project and for the founders to get it off the ground. Here’s how to join one:
You should join these whenever you have the chance because airdrops are one of the few opportunities with zero risk. It’s only risky if you have to hold cryptocurrency or pay high gas fees for an NFT.
Important! Just because it’s free, it doesn’t mean you should do anything they ask. Scammers sometimes run fake airdrops trying to steal your private keys or make you sign a fraudulent web contract. It’s recommended to learn about the 11 common types of crypto scams.
Crypto airdrop taxes are unclear depending on the type and national regulation. According to the IRS, crypto airdrops incur:
Income tax also includes new coins received from hard forks (e.g., Pulsechain), crypto payments, referral bonuses, and staking rewards. In the USA, long-term capital gains tax is 0, 15, or 20 percent depending on your annual income bracket. If you sell at profit within 12 months, it’s instead considered income tax.
Some questions yet to address are:
Many times, new tokens are overpriced for the first few days and then fall by 90%. Imagine you receive the airdrop for a token at $10, you choose not to sell, and it goes to $2. So while you don’t pay capital gains taxes on losses, you can lose a LOT in income tax.
The launch of PulseChain will become the largest crypto airdrop in history. That’s because the Pulse network is the first hard fork with the full system state of Ethereum. Every ERC-20 token will be compatible in PulseChain as a PRC-20, including NFTs.
All you need to do is get a crypto wallet with private keys (e.g., Metamask) and buy some coins on Ethereum Mainnet (the default blockchain). You then add PulseChain as a custom network, and when it’s live, you’ll get a copy of everything bought on Ethereum.
There are a few differences:
At the time of writing, the PulseChain crypto airdrop is open. Follow Pulsechain.com for news and instructions.
Making money with crypto airdrops is as easy as selling right away. However, you may not earn as much as if you held them, and it’s not easy to win one in the first place.
Luckily, dozens of airdrops happen every day. Explore them on social media, sign up for as many as possible, and you will increase your odds of winning something. Once you win tokens or NFTs, the selling decision depends on the project’s value.
Maybe it’s not just free crypto. Or it’s the next CryptoPunks NFTs. Maybe it’s a DeFi platform that pays you interest for staking.
Or maybe you just like the project and want to support it. Because airdrops are free of cost (and risk!), it’s in the end a subjective decision.
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Disclaimer:Please note that nothing on this website constitutes financial advice. Whilst every effort has been made to ensure that the information provided on this website is accurate, individuals must not rely on this information to make a financial or investment decision. Before making any decision, we strongly recommend you consult a qualified professional who should take into account your specific investment objectives, financial situation and individual needs.
Max is a European based crypto specialist, marketer, and all-around writer. He brings an original and practical approach for timeless blockchain knowledge such as: in-depth guides on crypto 101, blockchain analysis, dApp reviews, and DeFi risk management. Max also wrote for news outlets, saas entrepreneurs, crypto exchanges, fintech B2B agencies, Metaverse game studios, trading coaches, and Web3 leaders like Enjin.
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