Crypto airdrops: how they really work
Written by the Crypto Gratis editorial team · Last reviewed
An airdrop distributes tokens to people who already used a network. Understanding that one word — already — dissolves most of the industry that has grown up around promising you the next one.
What an airdrop is for
A new network needs its tokens spread across many holders rather than concentrated among founders and investors. Distributing to people who actually used the thing achieves that and rewards those who took a risk on it early.
The mechanism is a snapshot: at some past block, the project records which addresses did what. Eligibility is decided by that record. Nothing you do afterwards changes it.
Why the criteria are secret
If a project announced "we will reward anyone who makes ten transactions before June", it would receive ten transactions from a hundred thousand scripted wallets and reward almost nobody it intended to. So criteria are set retrospectively, often tuned to exclude patterns that look automated.
The direct consequence: there is no reliable way to position yourself for a specific future airdrop. Every alert list, paid group and "airdrop farming" course is selling access to a guess.
If you actually receive one
- Verify the announcement on the project's own domain, reached by typing the address rather than clicking a link.
- Claim from a wallet holding nothing else.
- Read the approval you are signing. Unlimited spending approval on a token you did not intend to spend is the warning sign.
- Revoke the approval afterwards via the block explorer's approval tool.
The tax point
Receiving tokens free is frequently a taxable event, valued at receipt, with a separate gain or loss on disposal. People who received a large airdrop, held it while the price collapsed, and then owed tax on the higher earlier value have had very bad years.
Rules differ by country. We are not tax advisers — if the amount is meaningful, ask someone qualified where you live.
See also: the four airdrop scam patterns and the wallet guide.
Sources
Everything above is based on the following. Where they and we disagree, they are right — check them before you act on anything here.