Your guide to making money with crypto airdrops

Earning passive income with crypto is an excellent and straightforward way to grow your wealth and get involved in the crypto economy without needing a significant upfront investment. Compared to traditional savings, crypto income strategies offer more substantial returns by leveraging the decentralized infrastructure of blockchain. While there are plenty of ways to make money with crypto, in this blog, we will focus on crypto airdrops and how they can be a viable alternative for financial growth. Airdrops news is everywhere these days, so if you’ve ever come across them and wondered how they work, we are here to shed light on the topic so you can confidently participate in crypto airdrops as a way to generate passive income. Let’s dive in!

Understanding crypto airdrops

Crypto airdrops are a market strategy for giving away free tokens to active users. They enable users to expand their portfolio without any additional costs and generate income by holding these tokens and hoping they will increase in value over time. 

There are multiple reasons why a crypto project launches an airdrop. First, cryptocurrencies need to raise interest in order to be profitable, and airdrops aim to create buzz around a project. By offering free tokens, companies seek to spread awareness of the cryptocurrency and increase their user bases. Moreover, airdrops can enhance liquidity as users increasingly begin to trade the new tokens. Companies can also foster community building and earn loyal users by promoting interaction and participation in the project. 

Individuals participate in specific activities, like owning a specific crypto, joining a project’s social media account, or engaging with the project’s community. Typically, airdrops have a value below $10 and also tend to lack liquidity. Some users join an airdrop only to sell the coins right away, which can lead to a decline in price. 

How to generate passive income with airdrops

Airdrops can be a lucrative way of generating passive income, but it’s essential to know how to use them effectively. Below, you can find 6 steps to ensure a smooth process:

Consider eligibility criteria

When participating in a crypto airdrop, you must meet the eligibility criteria, such as holding a specific amount of cryptocurrency. You also want to check the airdrop event’s duration and any other conditions, including eligibility requirements and participation steps. The airdrop’s duration refers to the time frame during which it is active, and participants can get their tokens. 

Pick a secure wallet

The next step is to make sure that the crypto wallet you’re using is compatible with the blockchain on which the tokens will be distributed in the airdrop. For instance, for many airdrops, you need an Ethereum-based wallet to participate. A good rule of thumb is to set up a separate crypto airdrop wallet, as this will help keep main investments separate and provide more security. 

Fulfill the requirements 

Most airdrops require you to complete specific tasks, including retweeting posts, following social media accounts, engaging in discussions in a project forum, and creating videos. Hence, it is imperative to follow the rules that each airdrop campaign establishes. 

Verify participation

Some airdrops require more verification procedures, like completing a KYC step. KYC is the acronym for Know Your Customer, and it is used to foster confidence and ensure every user undergoes identity verification, adding accountability if there’s any suspicious activity. However, keep in mind to use caution whenever giving personal information and confirm the validity of the project beforehand. To submit a wallet address for airdrop participation, copy the wallet address and paste it into the registration form of the airdrop, making sure it matches the blockchain network. 

Begin collecting tokens

After you’ve verified participation, it’s essential to monitor when the tokens will be distributed and mark the dates on the calendar. Note that this information regarding the distribution of tokens should always come from reputable and official sources to be legitimate. So, check the project website, official announcements, and social media accounts to verify any instructions and contract addresses. 

Move tokens somewhere safe

Suppose you receive a sizable number of tokens; in this case, it’s a good idea to keep them somewhere safe. Opting for a hardware wallet provides increased safety, ensuring that your tokens are safeguarded against malicious actors. 

Tips to maximize income with crypto airdrops 

If you’re considering participating in crypto airdrops, you’ll need a strategy to help you maximize your income. After all, you cannot be too sure when it comes to wealth-building in the crypto world, and it’s always better to think strategically and prepare effectively. Here are some ideas to consider: 

• Utilize multiple wallets. A helpful trick to maximize income with airdrops is to create multiple accounts or wallets and participate in an airdrop several times. This will increase your chances of earning more tokens from airdrops, but keep in mind that in some cases, only one participation per active account is allowed. 
• Use referral codes. Some campaigns provide additional airdrop tokens for social media promotion and referrals, so if you want to get the most out of an airdrop, consider posting referral links on social media or inviting your friends. 
• Target ecosystem protocols. Another effective strategy to maximize airdrops is to identify protocols that are the foundation for new ecosystems. Essentially, these protocols offer airdrops to stakers as new applications use their security features, making them the main targets for increasing airdrop rewards. 
• Consider looping. Looping means lending crypto to a protocol and borrowing against it, only to retake the borrowed assets. If you repeat this process, you can boost leverage and get more airdrop points due to staking yield and similar borrowing. 
• Participate in yield farming and staking. Consider participating in yield farming to maximize assets for extra income via governance participation, liquidity provision, or stake tokens in specialized platforms. These are two excellent strategies to employ when looking to maximize airdrops, but make sure to research them to understand how they work. 
• Hold tokens. Holding airdropped tokens and accumulating them can be very lucrative, particularly if a coin that’s only been launched gains tremendous popularity. As a token raises interest and gains trading volume, investors can see higher returns and maximize their initial holdings. 

Last words

Crypto airdrops are undoubtedly an appealing way to generate passive income, but you need to approach them effectively and learn how you can maximize your earnings. Hopefully, this blog has given you helpful insights into airdrops and how to get started with them. Remember that not all airdrops are created equally, and take the time to find the best ones by doing a bit of research.  When an airdrop is announced, you will usually find it on reputable crypto news outlets or the official website, so always verify its legitimacy to make sure you won’t fall victim to a scam.