Tools & Resources

Web3 Airdrops: The Guide To Staying Safe While Claiming Free Tokens

By The Fire Team
Web3 Airdrops - what are they and how to get them.

What Are Token Airdrops and How Do They Work?

If you’ve been around web3 for a while, you’ve probably heard of or even claimed a few airdrops. Maybe you were even around for the legendary $ENS airdrop, when many holders of ENS addresses were airdropped tokens worth five figure amounts.

But what exactly is an airdrop? 

Quite simply, it's a distribution of tokens, usually for free, to the wallet addresses of a specific group of users. They're kind of like surprise gifts from a protocol or company, usually after you’ve used an app or service for some time. 

Airdrops are a popular mechanism used by new or existing blockchain projects to distribute their tokens to the community. The aim can be multifold: to create buzz around a project, to reward loyal supporters, or to bootstrap a new community around a token. It's a win-win situation: projects get the attention and users they need while recipients get free tokens that might appreciate in value, grant governance rights or earn bragging rights.

The process of an airdrop can vary. Sometimes, you need to hold a particular token or perform a certain task to qualify for an airdrop. Other times, it might be as simple as just having an active wallet on a particular blockchain. The specifics are usually announced by the project team ahead of time.

How Can I Get Airdrops in Web3?

You're probably thinking: "Free tokens? Sign me up!" But how exactly can you get involved in web3 airdrops?

First, keep an eye on project announcements. Crypto projects will often announce their airdrop plans on their official websites, social media channels, or in their community Twitter, Discord or Telegram group. Some projects might require you to hold a certain amount of their tokens, some might ask you to participate in a specific activity. 

There are a few main ways to get token airdrops:

1. Retroactive Airdrop

This is the most common type of airdrop. A retroactive airdrop rewards early users of a dApp or protocol. 

This usually means you have to take certain actions before a specific date when a “snapshot” is taken (a snapshot collects all addresses eligible for the airdrop). 

To take an example from the recent Arbitrum airdrop $ARB, you became eligible by using their Ethereum L2 in various ways, mainly by bridging funds or transacting certain amounts. 

While many traders view airdrops as nothing but free tokens they can sell on an exchange, the protocols themselves often want to attract token holders to govern their blockchains and dApps. This creates a conflict: Traders want to maximize profits, but protocols don’t want traders to get their tokens for free. 

That’s why retroactive airdrops (and their conditions) are usually not announced before the snapshot is taken and the list of addresses is final. While airdrop rumors swirl and information sometimes leaks, this is how web3 companies minimize “airdrop farming”, which is when traders transact on protocols not because of organic interest, but merely to score free tokens. 

2. Vampire Attacks

Because a wallet’s activity is public on the blockchain, anyone can gather a customer list of any protocol, dApp or anything else on-chain. 

That makes it easy to execute so-called “vampire attacks”, where a company (usually a startup) gives free tokens to users of an incumbent or competitor. A famous example is LooksRare, which attacked NFT marketplace pioneer OpenSea by giving OpenSea’s best users a free $LOOKS token airdrop and skyrocketed LooksRare’s popularity.

This usually gets attention from those users and makes them at least try the new product. While this is mostly a marketing expense to a startup, to users it’s just another token airdrop.

3. NFT airdrops

Many NFT collections have secondary or tertiary collections, which existing holders can usually claim for free. A well-known one is the Mutant Ape Yacht Club collection, which was free for Bored Ape holders. Bored Ape holders also received Bored Ape a Kennel Club NFT airdrop, an Apecoin airdrop and an Otherside Plot NFT airdrop.

A Bored Ape NFT with Bored Ape Kennel Club NFT, Otherside Plot NFT and Mutant Ape NFT and Apecoin logo titled Airdrop

This is another type of airdrop: Instead of having to use any dApp or protocol, you merely have to hold a specific type of NFT.

Unlike retroactive token drops, NFT airdrops are often announced ahead of time because they’re likely to increase secondary trading and drive up the NFT collection’s floor price.

Now that you know a few types of crypto airdrops, let’s dive into how to claim them when you qualify.

How to Claim Airdrops in Web3

There are two main ways to receive token or NFT airdrops:

  1. Claim: Here, you need to connect your wallet and submit a claim transaction using your wallet. Claiming will usually cost you a few dollars in gas, but also makes sure that the token’s supply only goes to active wallets.
  2. Receive: Some projects drop tokens or NFTs into your wallet without you having to pay gas. This saves you some gas, but also comes at the risk of you not noticing the airdrop.

What Are Fake Airdrop Scams and How Do I Stay Safe from Them?

If you’ve ever seen a sample stand in a supermarket, you know people love free stuff. With the excitement around airdrops, it's unsurprising that bad actors try to take advantage of the situation. Fake airdrop scams have become a common menace in the crypto space.

A tweet promoting a fake airdrop scam in web3 featuring the memecoin $PEPE

A typical scam might involve the impersonation of a well-known project, luring users with the promise of an airdrop. Users are asked to provide their private keys or seed phrases to "claim" their tokens, and the scammers then use this information to drain the users' wallets.

Here are a few tips to stay safe:

  1. Never share your private keys or seed phrase: Legitimate projects will never ask for your private keys or seed phrase. These are meant to be kept secret and are your sole means of accessing your funds.
  2. Verify information: Always verify the information about an airdrop from the project's official website or official social media channels. Be wary of information from unofficial or unknown sources. Also, simulate transactions with Fire.
  3. Be cautious of unsolicited offers: If you receive an unsolicited offer for an airdrop, treat it with suspicion. Genuine airdrops are usually well-publicized and transparent about their process.

Airdrop Farming: How to maximize your free tokens

Because many see airdrops as essentially 'free money', it’s tempting to try and maximize how many tokens you get in your crypto airdrop. This is also called airdrop farming. 

Airdrop farming is a strategic approach to accrue as many tokens as possible from airdrops. While some airdrops randomly distribute their tokens, others give users more tokens the more active they are on the protocol. This creates an opportunity to create more activity.

Successful airdrop farming requires careful planning, research, and a proactive approach to engaging with various blockchain projects.

To maximize your tokens from airdrops, you need to stay updated about upcoming airdrops in the crypto world, understand their requirements, and take the necessary steps to qualify for these airdrops. 

This is the most difficult part because few projects will publicly state the requirements for their airdrop before it launches. Because each transaction on a blockchain costs gas fees, we also recommend only selectively increasing your activity on a given protocol if it’s an alternative to transactions you genuinely want to make. 

As an example, if you want to provide liquidity on Uniswap or earn fees from DeFi lending protocols, you might as well bridge some ETH over to a layer 2 solution if you expect there to be an airdrop soon.

How Account Abstraction Makes Airdrop Farming Easier:

Now, you might be wondering how account abstraction fits into all this airdrop farming action. Account abstraction, with its groundbreaking features based on ERC-4337, can help you get airdrops more efficiently. 

  • One of the ways account abstraction makes airdrop farming easier is by simplifying transactions. With its ability to batch multiple transactions into one, account abstraction could allow you to transact more easily on layer 2 networks and other protocols—and make it easier to fulfill the requirements to receive an airdrop.
  • Because account abstraction allows wallets to automate certain transactions, your wallet could automatically repeat the actions required to earn the airdrop. 

If you’re exploring Ethereum, check out Fire!

We’re a trusted chrome extension that simulates transactions before you sign any potentially malicious smart contract.
Check it out
To Summarize

Airdrops in Web3 can be a fantastic opportunity to discover new projects and earn free tokens. However, like any aspect of the crypto world, they come with their own risks. As always, the golden rule is to do your own research. Understand the project behind the airdrop, verify the information from official sources, and never, ever share your private keys or seed phrase.

In the end, staying informed and vigilant is the best way to navigate Web3, catching legitimate airdrops and dodging the scams. Whether you're here for the potential financial gains or the sheer joy of being part of innovative projects, airdrops can add an exciting dimension to your Web3 journey.

And to make sure you never lose your assets download Fire to simulate transactions and know exactly what you’re signing, every time. Click here to install our free Chrome extension today.