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The Rationale Behind The Existence Of Crypto Airdrops

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airdrops

Airdrops have emerged as the most captivating crypto trend of the year, garnering widespread attention in the crypto space.

It is evident to see why: who does not appreciate receiving free money, especially when all you have to do to get that free money is to support young crypto projects?

Bitcoin Faucets

You may be unaware that Bitcoin was actually a pioneer in this concept during its early days through “Bitcoin Faucets.” Simply connect your Bitcoin address, and you will receive a small stream of Satoshis for free.

Bitcoin enthusiasts understood that offering something for free was the simplest way to encourage people to try it out. And eventually, faucets became obsolete as Bitcoin’s value soared through the years. Nonetheless, faucets served their purpose very well: now, almost everyone knows what Bitcoin is.

Does This Mean Airdropped Tokens Don’t Have Value Yet?

Keep in mind that an airdrop serves as a marketing tactic to swiftly gain traction for newer projects. Essentially, these projects are acquiring your attention without investing some of their own capital.

When you sell your airdropped tokens, it is the funds of other users that compensate you for them.

Why Would Users Buy When You Received Those Tokens For Free?

Their rationale lies in the belief that heightened awareness fosters usage, and increased usage drives up the price of the asset. When the market observes a substantial number of airdrop participants claiming their token rewards, it expects a surge in price and adjusts its investments accordingly.

Bottomline

Essentially, the fundamental concept has remained unchanged since the old days of Bitcoin Faucets: awareness influences the price, and airdrops represent the latest manifestation of this principle.

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