Airdrop

Airdrop definition: The distribution of free cryptocurrencies or tokens to users, usually as part of a promotional event.

An airdrop describes the free distribution of digital tokens to public wallets. In the field of cryptocurrencies, the term airdrop denotes a distribution mechanism where digital tokens are freely provided to a selection of wallet addresses on a blockchain. This process is commonly used across various blockchain networks, including well-known blockchains like Bitcoin and Ethereum.

An airdrop typically occurs in one of two situations. Firstly, an airdrop can occur when a project decides to distribute free tokens to holders of an existing cryptocurrency. This can be a strategy to increase the dissemination and awareness of the new token, making it a key tool for marketing and user acquisition in the cryptocurrency space.

Secondly, an airdrop can also be used to distribute new tokens after a blockchain undergoes a 'fork'. In cryptocurrency terms, a fork represents a divergence in the blockchain where the chain splits into two paths, each following a different protocol. The distribution of tokens following such a fork ensures that the new token has a broad base of holders.

A high-profile example of a recent airdrop is the distribution of UNI tokens by Uniswap. Uniswap is a decentralized exchange on the Ethereum blockchain. In this instance, Uniswap allocated its newly minted UNI tokens to every address that had interacted with its platform prior to a certain date. The result was a distribution of 15% of the total supply of UNI tokens.

In summary, an airdrop represents a method of token distribution within the cryptocurrency landscape. Airdrops serve various purposes, ranging from marketing initiatives and user rewards to the broad dissemination of tokens following a blockchain fork.