Glossary
Airdrop
A crypto airdrop is a free distribution of tokens to many wallet addresses, usually to reward early users, decentralize ownership or promote a new project. Eligibility is often based on a snapshot of past on-chain activity.
Also called Token airdrop, Crypto airdrop, Free token distribution, Retroactive airdrop
See also
A crypto airdrop is the free distribution of a token to a large number of wallet addresses. Projects use airdrops to reward people who used their product early, to spread ownership of a governance token across a community, or simply to attract attention when a new token launches. Recipients do not buy the tokens, but they usually need to meet conditions and to claim them.
How an airdrop works
The project decides who qualifies and takes a snapshot: a record of addresses and balances at a given block or date. Criteria can include having used an app, provided liquidity, held another token or completed tasks. The project then publishes a claim contract. Eligible users connect their wallet to the official site and sign a transaction to receive the tokens, paying the network fee. Some airdrops are sent directly without a claim step.
Many campaigns today are “retroactive”: the criteria are revealed only after the snapshot, to reward genuine use rather than people farming the rules. Allocations often depend on activity, and part of the tokens may be locked and released over time, which links airdrops to the project’s tokenomics.
A real example
In September 2020, Uniswap launched its UNI governance token. Every address that had interacted with the Uniswap v1 or v2 contracts before the snapshot of 1 September 2020 could claim 400 UNI. Users who had made a single swap months earlier suddenly received tokens with a market value, which made this airdrop a reference for the sector. See our Uniswap (UNI) page.
Why airdrops matter
For projects, an airdrop distributes voting power and builds a user base. For users, it can be a reward for trying new protocols. Airdrops also shape token supply: a large share given to short-term farmers can create selling pressure right after the claim opens.
Risks and limits
- Scams: fake claim sites, impersonated social accounts and unsolicited tokens that lead to malicious contracts are very common. A real airdrop never asks for your seed phrase. Read how to avoid crypto scams.
- Wallet drainers: signing an unknown approval can let an attacker empty your wallet. Use a separate wallet for claims.
- Costs and effort: farming an airdrop costs fees and time, with no guarantee of eligibility.
- Taxes: in many countries, airdropped tokens are taxable income or have a cost basis of zero. Check local rules.
- Value: the price often falls after launch as recipients sell.