Last year was a great year for cryptocurrencies in general but what was even greater was the ICO space which overshadowed the gains made in crypto. Over 5 Billion dollars was raised last year by start-ups with ICO’s. Many investors saw returns of 10x, 20x, 50x, 100x and even more making hundreds of new millionaires worldwide.
This year halfway through 2018 and the capital raised through ICO’s has already surpassed that of the whole of last year. Roughly $7 Billion has been raised and that figure is about to grow exponentially with the looming launch of the EOS blockchain. A blockchain that is said to be better than the current ICO’s blockchain leader Ethereum. The EOS blockchain promises to be faster, more scalable and will have free transactions which will be an attractive platform for new projects looking to launch their own ICO’s.
As the market is being saturated with dozens of ICO’s every day it has become harder for newer projects to stand out. Like in any other free market projects have been forced to adapt their marketing strategies and what they’ve come up with is nothing short of brilliant. Enter the age of airdrops.
Airdrops are some form of a marketing strategy which offers tokens as incentives for people to sign-up to their platform, social media and/or newsletters. As you can imagine airdrops are a great way to attract attention to your project and stand out amongst the crowd of hundreds of start-ups.
One benefit I’ve already mentioned which is that they bring attention to your project and that’s the biggest main goal of any company when it comes to marketing, to have people come to your store. Another great benefit of an airdrop is that it helps build a community earlier on and usually it’s before the product/platform has even been launched.
You can then capitalize on this community by launching your alpha & beta products for the community to test out and report any bugs that may come up. This will ensure that you realize what works and what doesn’t and with the right feedback new features can be added to improve the user experience. All this can be done before the official product launch because of a simple airdrop which resulted in a community that’s already committed to this project through the tokens.
As with anything involving some kind of a monetary gain, airdrops will also attract bad actors. These are people who go around claiming airdropped tokens with no intentions of partaking in any of the initiatives of a project. They end up becoming liabilities to your project because they possess tokens which would be better off in someone else’s hands.
Some people feel less incentivized to research a project now that they already own its tokens unlike in an ICO wherein it is ideal to research before you invest. Having already possessed free tokens there’s less reason for people to invest anything else unless they’re impressed with that project. This is not much of a disadvantage as these people would not have invested anyway if they had done the research for an ICO.
Lastly, and perhaps the biggest of liabilities of an airdrop is that it runs the risk of providing the opportunity for people to dump the tokens for a quick payout as soon as it is launched on exchanges. As some projects have learned the hard way that this kills the project before it could even take off. These start-ups are then left back to square one trying to rebuild their projects.
As this space continues to mature so do start-ups. Inventive ways are already being carried out counter and limit these detrimental outcomes and improve the ones that add to a project's value. One such counter is locking the airdropped tokens until a couple of weeks after the ICO phase has ended and the people who’ve actually invested money in the project have gotten the chance to sell their shares.
What do you think of airdrops? Do you think they’ll become more valuable than an ICO? Please share your thoughts and opinions in the comments section below.
P.S. As I'm finishing up writing this post I just got notified that EOS has finally gone live. EOS TO THE MOON!!!
Have a great day!
