- Nov 1, 2017
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What is airdropping?
Simply put, airdropping is a free coins or tokens distribution. Use of this technology is possible both during the ICO and after its completion. The main criteria of getting free tokens are a positive wallet balance and possession of the keys from it. If the funds are on an exchange (such as Coinbase or Kraken) there is a very high chance that you will not be able to obtain tokens. The reason is that most exchanges keep your funds in the inner wallets and very often offline in cold wallets. The format of the token distribution is the following: in the pre-announced time a "snapshot" of the blockchain is published, and any Ether holder, meeting distribution criteria receives his share from the free tokens. The amount is distributed in proportion to the wallet balance. The greater the wallet balance is, the more you get.
The companies’ experience
What famous companies have already used the airdropping technology? One of the latest and clearest examples is Indorse , which announced free distribution of 65,000 IND tokens to the holders of TenX (PAY), Digix (DGD), CoinDash(CDT) and 0x (ZRX) tokens. Ethereum addresses which have less than 3000 and more than 0.01 Ether will receive it for not to send tokens to non-active or exchange accounts. The campaign provides a double bonus, a user needs to visit the official Indorse site and register an account. David Moskowitz, Indorse co-founder, said: "Choosing these communities for our tokens distribution, we guarantee wide dissemination and tokens transfer to the wallets of the most active Etherium tokens owners. Our ecosystem is thriving due to the active participants, so they will get financial reward in the form of IND token".
Indorse collaborations are met with huge support from the developers. Adam Efrima, CoinDash director shared: "IND Token will be added to CoinDash ecosystem in the near future, so that our users will be able to manage another asset in CoinDash.”
In early September, their airdropping has started and here are the results they have achieved. On the official Indorse website they’ve published information that fee has been 27 422 Ether, which is around $ 9 million. Of course this figure indicates remarkable success of the company, despite the fact that according to the Medium, distribution covered only 1800 unique accounts. Such results will not go unnoticed by the community; in the near future we will see some attempts to launch similar PR campaigns.
Another example is the upcoming airdrop of OmiseGo – a young cryptocurrency project by Asian payment operator Omise, specializing in domestic and cross-border remittances. According to the company’s blog 5% of all OMG will be sent to Ethereum wallets, which contained more than 0.1 ETH on a definite block. The intended addresses cover is more than 450 000! The launch was scheduled for the 4th of September, but has been postponed repeatedly. In the end, on the 24th of September, on their Twitter, OmiseGo reported the successful attempt with the help of Vitalik Buterin, who wrote the adapted smart contracts for the distribution on such a vast basis. Totally there were 5242 transactions on 36090 blocks to send 7012 269,91226 OMG to more than 460 000 people.
We can also highlight the ambitious project Cryptonex (CNX) that is a global blockchain acquiring. Its ICO ended on September 30. Due to airdropping, during the ICO period the company managed to collect over $17 million. More than 5000 addresses received bonus tokens, and the airdrop took about two weeks. This is the only Russian company, which has adopted foreign colleagues’ experience and openly shared their financial and technical results. Such events are a great way to introduce a cryptocurrency and to involve new people in crypto industry. Trond Vidar Bjorøy, the head of Scandinavian company ATPI production and implement, believes that: "companies are airdropping not because they are good guys. It's all a part of the elegant PR plan that will increase token value. Аirdropping is not only advertising, but it’s also a way of token price increase. The effect of ownership suggests that people tend to appreciate more the things they possess. In the case of OmiseGO, half a million people will begin to consider OmiseGO more valuable than other tokens simply because they had become their owners. Many will continue to accumulate the currency, because they will feel like investors. Some owners will decide to reach round numbers, and some others will prefer to avoid the risk of purchasing unknown currencies".
How to launch airdropping?
Suppose you're a developer and owner of your own coin or token and want to start airdropping. How to do it?
The process can be divided into several stages:
1. The aim and airdropping type.
Depending on the stage of the project development and the goals, one must determine what to distribute: free tokens of the main contract, the "bonus tokens" as a reward when buying the basic token, or the token giving a discount for the coins purchase. We’ve chosen the following tactics: we send 1000 СNX, a user gets it as a bonus when purchasing 5000 CNX, and so the bonus is 20%.
2. Blockchain analysis. Identification of the target audience.
In the case of OmiseGo, the giant audience of 450 000 addresses was chosen. Our criteria are more segmented and the distribution conditions are different, so we assume the maximum coverage of 150 000 addresses, which is also a tremendous amount.
3. Smart contract creation and software writing.
If you plan to send tokens on the basis of a basic smart contract, then this possibility should be foreseen in advance.
4. Tokens distribution.
In case of Indorse, they sent out tokens to 1800 Ethereum addresses. According to our statistics, depending on the network load, our tokens are received by 1000 - 3000 addresses. The launch should be smooth and gain momentum gradually, to ensure that it is possible to get feedback and adjust distribution settings.
5. Efficiency track.
One can use Etherscan that shows information about all Ethereum transactions. Besides, there are some classical tools such as Google Analytics. Many questions are received from the tokens receivers on the forums, social networks, channels and groups. Due to the fact that the company finds time to answer most of the questions we get positive feedback from airdropping.
Despite seeming simplicity of these 5 steps implementation, there are a number of nuances, seriously hampering the process. Here are the key ones.
Etherium turnover capacity - nominal turnover capacity is 25 transactions per second, but it's the overall number of the entire network, and those transactions that have the greatest commission are sent. That’s why, on the basis of the budget, the maximum commission per transaction should be determined and some adjustments should be made during airdropping. It slightly reminds stakes control in contextual advertising. First of all, top priority transactions are placed on the block, and only then airdropping and other transactions with a lower commission by a residual principle. For this reason, it is impossible to carry out distribution to all the addresses in one day, even specifying maximum commission.
The transaction fee - the amount of the fee varies depending on the network load. It is influenced by many technical factors. The important thing is that you can achieve transaction fee in the form of 10-20 cents in the airdropping process and ensure new investments volume.
Team skills– the team should understand the blockchain operation principles, as well as have high programming and network skills for not to keep postponing airdropping.
The impact on the blockchain. Conclusion
We’ve introduced the technology allowing making a quality dialogue with private investors and gaining trust in the eyes of the tokens receivers with a relatively small financial cost. Any good project policy is that offering something useful to the blockchain community, you gain trust and investment partners. Western experts believe that in the nearest future this technology will become a new PR trend. For this purpose there are some preconditions: the target audience coverage and many others, but, given the technical complexity and the nuances faced by the company, and considering Ethereum turnover capacity, transaction fees andsevere requirements to the human resources needed for implementation, to the question: "Will airdropping become a new PR trend?", we answer "No". Will it keep developing and gain popularity in the cryptoworld? "Definitely yes!".
