Airdrop (cryptocurrency)

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 edit

References edit

  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".
  4. ^ "Bitcoin Is on a Collision Course With the IRS". Fortune. Archived from the original on 2021-09-11. Retrieved 2018-01-17.