WHAT ARE RETROACTIVE AIRDROPS

There’s no better way to explain retroactive airdrops than the fact that they’re basically tokens of appreciation for interacting and supporting a crypto project in its early days. When a relatively new crypto project wants more users to interact with it, it launches retroactive airdrops. What this means is that anyone who meets a set number of interactions requirement gets a certain number of tokens of that crypto project for free.

These tokens are usually worth a significant amount of money by the time the airdrops are sent out. A lot of cryptocurrency projects have gained popularity due to launching a retroactive airdrop early on. Though you should also know that though these projects come with a ton of benefits for a cryptocurrency, they can also come with a couple of drawbacks for the end-user.

Average Retroactive Airdrop Value Chart

THE DYDX PROJECT

The dYdX cryptocurrency is a great example of a crypto that took off as a result of its retroactive airdrop release. dYdX released probably the biggest retroactive airdrops to date. Their retroactive program distributed about 7.5% of their total token supply. That was 75,000,000 DYDX tokens. The value of the airdrop at the time of its release was $1 billion.

In this airdrop, 310 DYDX tokens were released to every user who contributed at least $1 in trading volume. In addition to this, 9529 DYDX tokens were also released to every user who contributed over $1 million in trading volume. This was the biggest airdrop in the crypto space.

DYDX Airdrop

THE MARKETING TACTIC

Now if you’re wondering why a crypto project would want to give away so many tokens for free, the answer is that it’s all just a marketing tactic to lure in new investors. Let’s be real. If something is being given for free, we’re obviously going to try to get it. This is exactly why retroactive airdrops are so successful. People start to interact with a new cryptocurrency just because they believe that they’re going to get some free stuff. At the end of the day, the goal is to gain a lot of supporters and investors around the project to get it trending and rise in value.

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ELIMINATE COMPETITION

Retroactive airdrops are also a popular way to eliminate competition. If you believe that your competitor is doing better than you, you would launch a retroactive airdrop project where the rules to enter include not investing in the competitor’s project. This would cause the competitor to lose supporters and investors as people would be more drawn toward the freebies they would be getting at the retroactive project. Therefore, retroactive airdrops are a great way to get rid of competition and make your way up the crypto industry.

RISKS WITH RETROACTIVE AIRDROPS

Like every other project in the crypto space, investments come with a lot of risks. While you may be interacting with a certain project in order to qualify for the airdrop, there may not even be an airdrop to begin with. That may have just been a scam to lure you in to interact with the crypto project. Therefore, you would’ve spent a lot of time and money on the project for no benefit.

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