An Airdrop is the distribution of tokens or coins directly into crypto wallets. The amount distributed to each address depends on the type of airdrop, but they are typically based on asset holdings at a specific time or block height.
Airdrops are often used to encourage adoption and interest in a cryptocurrency asset, or to pay dividends as a reward for holding a cryptocurrency asset.
1.1 Exchange Airdrop
An exchange airdrops assets into each persons account based on their holdings on the exchange at a given time. For this type of airdrop users typically hold their funds on the participating exchange at the specified blockheight, or over the specified time. The amount distributed to each address is usually proportional to the amount of total ownership the address has during the time period.
1.2 Wallet Airdrop
Everyone who had an ETH balance on Sept 4, 2017 was airdropped some OMG tokens. The amount was based on 5% of the total ETH supply, divided by each wallets ETH holdings. The OMG tokens were then distributed to each ETH address automatically. A caveat to this is that people who held their ETH on an exchange did not get any OMG tokens, as the users were not in control of their own private keys to receive them; another reason to control your own private keys.
* All terms and definitions may update as the Cryptionary improves.