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An airdrop is an unsolicited distribution of a cryptocurrency token or coin, usually for free, to numerous wallet addresses. Airdrops are associated with the launch of a new cryptocurrency or a DeFi protocol, as a way of gaining attention and new followers. [1] [2]
Airdrops aim to take advantage of the network effect by engaging existing holders of a particular blockchain-based currency, such as Bitcoin or Ethereum, in their currency or project. [3]
In the United States, the practice has raised policy issues about tax liability and whether they amount to income or capital gains. [4]
