One of the biggest challenges for startups in the cryptocurrency space is to raise people’s awareness of your project, especially when it is time to raise capital or to boost the growth of the network.
Is an airdrop the answer to these challenges?
The reason behind airdrops is not simply to give the public free coins, but rather as part of a more elaborate corporate strategy. At first, airdrops are used to increase more awareness around a token, which might lead to an increase in the token value and to the creation of a network effect.
This marketing strategy plays on a systematic pattern known as divestiture aversion, suggesting that individuals value something higher if they own it and are part of it.
Airdrops are a great tool to reward your users and investors for their loyalty.
Second, it’s a great way to avoid regulatory like the SEC and to create Fomo and Incentivize loyalty.
We see more projects having solely a private (seed) round and airdropping another portion of the available tokens to the rest of the interested users, for solely these reasons.
Which Impact Do Airdrops Have On Token Price?
By searching through several of the more serious projects, our investigation showed that about 65% of the airdropped tokens are still being held after 2 months on the exchange.
This means that they DO NOT lead to a big sell-off other than the normal tokens which are being purchased during the ICO.
There are several effective examples of projects that have used the airdrop methodology, with Ontology leading the way of extremes by airdropping al their ICO available tokens to the participants, and now being one of the best projects in 2018.
Conclusion!
Airdrops are a highly efficient tool to gain traction from your project and to involve the community.
It is, however, important to have a strong community next to the users you gain from conducting an airdrop, and therefore its a necessity to use other effective marketing tools to build your followers.
We believe that airdrops are not going anywhere and will become a big part of the crypto space, especially now with the SEC getting more strict by the day.
Like the article and want to conduct an airdrop yourself or find other effective ways of marketing during the ICO.
Contact us @ Digichain Capital