Airdrop (cryptocurrency)

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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 often associated with the launch of a new cryptocurrency or a DeFi protocol, primarily as a way of gaining attention and new followers, resulting in a larger user base and a wider disbursement of coins. [1] Airdrops have been a more important part of ICOs since crypto entrepreneurs have started doing private sales instead of public offerings to raise initial capital.[ citation needed ] One example of this is by the company Omise, which gave away five percent of its OmiseGO cryptocurrency to Ethereum holders in September 2017. [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]

See also

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References

  1. ↑ Van Boom, Daniel. "Crypto airdrop season: Why people are making thousands for 'free'". CNet. Retrieved 8 March 2022.
  2. ↑ Marshall, Mo (2017-09-06). "The latest crypto PR craze: 'Airdropping' free coins into your wallet". VentureBeat. Retrieved 2022-10-10.
  3. ↑ BJORØY, Trond Vidar (2017-09-06). "The latest crypto PR craze: 'Airdropping' free coins into your wallet". venturebeat.com.
  4. ↑ "Bitcoin Is on a Collision Course With the IRS". Fortune. Archived from the original on 2021-09-11. Retrieved 2018-01-17.
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