Nothing is more important to most token investors than a return on their investment. Because of the volatility, this can be done quickly or as a daunting task. As a result, token airdrops are a low-cost way to boost your portfolio’s returns. So, what is the value of token airdrop for your GameFi project?

1. What is a token airdrop?

Value of token airdrop for your GameFi project

A token airdrop is a method of obtaining a free token from a token project. These tokens can get in a variety of ways. An airdrop is frequently associated with free cryptocurrencies, but this is not always the case. You must invest time and effort or risk incurring transaction fees. It is, however, possible to take part in an airdrop for free!

2. Value of token airdrop

Because they are the primary beneficiaries of such events, token projects distribute generous bounties via airdrops. Let’s explore the value of a token airdrop for your GameFi project.

Value of token airdrop for your GameFi project
  • Creating Awareness

The primary reason that blockchain startups conduct airdrops is to raise awareness. ICOs took center stage in the early days of crowdfunding. However, issues quickly arose. During the gold rush, a flood of startups emerged, oversaturating the market, frequently with just a flimsy and partially copied white paper in hand and scaring investors away.

  • Rewarding Users

Unfortunately, many investors in the crypto ecosystem are only interested in the highest return on investment (ROI) and are unconcerned about a project’s long-term viability. As a result, they jump from one project to another, dumping their heavy bags after a pump and making huge profits from small-time investors while adding no actual value to the protocol. This type of behavior can be detrimental to a cryptocurrency platform.

To combat this, some startups hold airdrops to distribute free coins to reward loyal users who use their platforms or keep a certain amount of tokens in their wallets for specific periods.

  • Decentralizing Token Distribution

Deep-pocketed investors may use their disparate wealth to secure bargain prices during the early days of a coin, allowing them to hoard a significant portion of its circulating supply. The issue is that concentrating large amounts of coins in the hands of a few leads to centralization, which is currently one of Dogecoin’s significant disadvantages.

In such cases, projects may choose to conduct airdrops to balance a token’s distribution.

  • Attracting Investments

In most cases, token airdrops are followed by token offerings, such as ICOs, IEOs, IDOs, etc. Airdrops are a clever way to increase funds raised without spending too much on marketing, as this strategy is linked to raising awareness.

When a project launches and conducts an airdrop, the generated buzz helps drive the price of a token upward because most recipients will shill projects that give them free money. Especially in today’s online economy, where every interaction metric, such as trending Google search terms, social media brand mentions, and community followership count on Twitter and Telegram, can be measured and used to attract investors, big investors or “whales” use these analytics as an investment weathervane to gauge a project’s prospects. As a result, an airdrop that significantly increases community engagement could boost the company’s overall capital for a relatively small number of tokens allocated to the airdrop.

  • Learning More About Its Community

Airdrops also allow projects to collect data from the crypto community. Some require recipients to fill out a form with personal information, such as email, social media, and their thoughts on crypto projects. A project’s team can create targeted marketing campaigns using this information.

Conclusion

Token airdrops are a marketing strategy used by startups to give tokens away for free or in exchange for minimal promotional work. If you are interested in blockchain, contact SmartOSC to receive full-service blockchain development solutions.


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