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What is a crypto airdrop? How airdrops work

What is a crypto airdrop? How airdrops work
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Published on 5 min read

A crypto airdrop is a distribution of free tokens sent directly to wallet addresses, usually to reward people who used a protocol before it had a token. Projects use them to decentralize ownership and turn an anonymous user base into one with a stake in the outcome.

Uniswap set the template. In September 2020 it distributed 400 UNI to every address that had ever interacted with the protocol, more than 250,000 wallets, including people who had made a single swap two years earlier.

How airdrops work

Most follow the same sequence.

  1. A protocol launches with no token and runs for months or years.
  2. Users trade, lend, bridge, or otherwise interact with it.
  3. The team announces a token and a snapshot, meaning the block height at which activity was measured.
  4. Eligible wallets are calculated from that snapshot, frequently in tiers based on usage depth.
  5. Users claim their allocation, paying gas fees to do so.

Snapshots are usually taken retroactively and announced afterwards. Deliberately so, since publishing the criteria in advance would let people game them in the final days.

Types of airdrop

TypeHow you qualify
RetroactivePast usage of the protocol, measured at a snapshot
HolderHolding a specific token or [NFT](/learn/nft) at a given block
Task-basedCompleting defined actions, often bridging, swapping, or testnet use
ForkAutomatic, when a chain splits and holders receive the new coin
ExclusionaryThe reverse, where certain addresses get deliberately filtered out

Airdrop farming and why it got harder

Farming means using protocols specifically to qualify for a future token. Sybil farming is the industrial version, where one person runs hundreds or thousands of wallets to multiply an allocation.

Projects fight back with clustering analysis. Wallets funded from the same source, linked by shared transaction patterns, or behaving identically get traced and filtered. Several projects have publicly excluded tens of thousands of addresses before distribution.

Economics shifted too. Wider awareness means more wallets chasing the same allocation, and qualifying across multiple protocols costs real money in gas and idle capital.

Airdrop scams

Free money is an excellent excuse to get someone to connect a wallet, which is why this is one of crypto's most reliable scam vectors.

Warning signs:

  • Tokens appearing in your wallet that you did not expect, with a website in the name
  • Any claim page requesting your seed phrase, which no legitimate airdrop ever needs
  • Urgency, countdown timers, or a claim window closing in hours
  • A claim transaction requesting unlimited spending approval on your tokens
  • Announcements from accounts impersonating a real project, frequently with near-identical handles

How to protect yourself:

  • Never enter a seed phrase into any site, for any reason.
  • Reach claim pages through official channels, never through a link inside an unexpected token's name.
  • Check what a transaction actually approves before signing it.
  • Leave unexpected tokens alone. Holding them is harmless. Interacting is where losses happen.

What airdrops do not guarantee

  • That the token has value. Many airdropped tokens trade below their first-day price permanently.
  • That claiming is free. Gas costs money, and on a congested network the claim can exceed the allocation.
  • That you qualify. Criteria are set retroactively and frequently exclude activity people assumed counted.
  • That the distribution is fair. Tiered allocations, insider knowledge of criteria, and sybil clusters all skew outcomes.

Trade airdropped tokens on mb.io

Receiving a token is one thing. Having a regulated venue to trade it is another.

mb.io is a regulated crypto spot exchange backed by MultiBank Group, a financial institution founded in 2005 that serves more than 2 million clients across 100+ countries.

  • Regulated by VARA in the UAE and AUSTRAC in Australia
  • Every listed asset is reviewed before it reaches the platform
  • 10/10 security score from Hacken, an independent blockchain security auditor
  • Institutional-grade MPC custody powered by Fireblocks, with segregated client funds
  • Buy, sell, and swap in three steps, from sign-up to purchase
  • 24/7 multilingual customer support

Open your account and start trading on mb.io.

Frequently asked questions

Are airdrops actually free?

The tokens are. Qualifying rarely is, since most retroactive airdrops require prior on-chain activity that cost gas, and claiming costs gas too. Farming across several protocols also ties up capital.

Do I owe tax on an airdrop?

In many jurisdictions yes, frequently as income valued on the day received. Rules differ significantly by country, and this is not tax advice, so check your local position.

Why did I get crypto tokens I never asked for?

Sometimes a legitimate distribution. More often a scam, since unsolicited tokens with a website in the name are a standard phishing tactic designed to pull you onto a malicious claim page.

What is an airdrop snapshot?

A specific block height at which wallet balances and activity are recorded. Everything after that block is irrelevant to eligibility, which is why snapshots are usually announced after the fact.

Can I still qualify for future airdrops?

Protocols without tokens keep launching, so the opportunity has not closed. Competition is far heavier than in 2020 and sybil filtering is considerably more sophisticated.

What was the Uniswap airdrop?

In September 2020, Uniswap sent 400 UNI to every address that had ever used the protocol, reaching more than 250,000 wallets. It established the retroactive airdrop as a standard tactic.

What is sybil filtering?

Analysis that identifies clusters of wallets controlled by one person, using shared funding sources and behavioral patterns. Projects routinely exclude tens of thousands of addresses this way.

Should I claim an airdrop I did not expect?

Treat it as suspicious. Legitimate claims are reachable through the project's official site. Anything that arrives with a website embedded in the token name is a phishing route, and interacting with it is the risk.

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