This is a sentiment people in crypto increasingly believe lately. After the recent Arbitrum airdrop, the belief has only strengthened. Some describe airdrops as life-changing events, and this is true in many ways and for many reasons.
Why crypto airdrops are the best?
It’s suitable for anyone just starting
Not everyone in crypto started with substantial capital in their wallet when first they tried their luck with crypto. And many, also don’t have that much knowledge about the industry. Low capital, low alpha, but you still can succeed and have great returns. What’s not to like?
It doesn’t need much money. In many cases, it only requires you to pay gas fees. Projects want users to interact with their protocols, and that doesn’t always mean you have to spend. Even when projects like ENS was requiring you to create an ENS domain, and Blur required users to trade NFTs, in the end, you still get the assets (the NFTs/the ENS), and the only money you spend and never get back is the gas fee.
Moreover, crypto nowadays is not like pre-2020 crypto, where everything was cheap. There’s a higher bar of entry when it comes to capital. When an airdrop event like Arbitrum requires you to store and send assets on their chain practically without a minimum amount, that would open opportunities to more people.
The second point is that getting airdrop doesn’t need much crypto (investing) skill too. Let’s compare it with the second best way (in my opinion) to make incredible wealth in crypto: By investing in small caps.
Let’s compare it with hunting small cap
Hunting small caps is hard, and with much more uncertainty than airdrops. It is especially impossible for new entrants too. Just like with capital requirements getting difficult in crypto these days (if you don’t have much money, it’s hard to achieve something on-chain with yield.) So was the pool of good quality small caps. It gets much smaller.
Crypto today is no longer the day of Uniswap, where the exchange was practically the only DEX in town. A lot of things go 100x in such a short time, you can safely accuse the phenomenon of rampant speculation — be it VCs pump and dump, Koreans traders being degen as usual, or everyone piling into some short-term narratives. There’s a bigger, scarier risk of getting caught in the heat of things at the wrong time. Welcome to the definition of exit liquidity.
Trust me, compared to the world of small-cap hunting, airdrops look much more peaceful, and heavenly. A wallet of mine got an airdrop on Arbitrum simply because I used it as backup cold storage for some of my ETH (It was cheaper to send it there from CEX where I bought the ETH.) There was almost no effort, especially because of security reasons, I didn’t even let the cold storage wallet interact with any smart contract. The wallet didn’t even do any DeFi activities yet still got airdropped.
Airdrops are much more reliable compared to investing in big caps
Now let’s compare airdrops with another “slow and relaxing” way in crypto: stacking sats (or Ethereum.)
You can argue that it is as peaceful (is it?), but when it comes to ROI, are both even comparable? Especially if you are a relatively new entrant to the space. This is the argument I’ve been making all this time about big caps: They are not the playing field of non-whales.
Oh, by the way, I was joking about the “slow and relaxing.” Have you seen the state of the market these days? What about the last year's continuous black swans?
And it’s not like both — stacking big caps and hunting airdrops — can’t go side by side. Two birds one stone. If you have $100, the ROI will be nothing much if you stake it to lido at 4% a year. But it could be life-changing if you happen to use it on Optimism or Arbitrum’s DeFi.
The best risk and reward ratio
We can conclude that airdrops have the best rewards with risk as low as it can be in crypto.
The seed of wealth usually starts from these airdrops. From these airdrops, post-2020 entrants have made their fortune. It’s been a long time since 2013’s Bitcoin and Ethereum ICO. Airdrops are a new wealth-creating opportunity in the post-ICO crypto era.
The non-monetary benefit of airdrops Do you think the benefit of airdrops stops here? Nope, it doesn't. It increases your love for the indus- try. The passion that's fairly incen- tivized. You are also incentivized to learn, not only by theory but also actually by doing and practicing. In the long run, your skill would be nothing but increasing. You get better spotting opportunities. The not stressful part also benefits personal health.
For the project, airdrops increase participation and usage. If it's a goV- ernance token, airdrops help create a sense of community through gov-
ernance and DAO. (Although we still
have so much to learn on that Dart.)
Summary of the content
The article discusses the benefits of participating in crypto airdrops, which are free distributions of cryptocurrency to users. Airdrops are seen as a low-risk and easy way to create significant wealth, particularly for new entrants to the crypto space who may not have substantial capital or investment skills. Compared to investing in small caps or stacking big caps, airdrops are viewed as more reliable and have a better risk and reward ratio. Additionally, airdrops provide non-monetary benefits such as increasing passion for the industry and incentivizing learning and skill development. For projects, airdrops can increase participation and usage and create a sense of community through governance and DAO.
