1. noun
An Airdrop refers to the strategic distribution of tokens or coins directly into the digital wallets of users. The quantity distributed to each recipient is typically determined by the type of airdrop and may be based on the user's asset holdings at a specific time or block height.
Airdrops serve as a powerful tool to foster adoption, generate interest in a cryptocurrency asset, or to distribute dividends as a reward for holding a particular cryptocurrency asset.
1.1 Exchange Airdrop
In an exchange airdrop, assets are distributed to each user's account based on their holdings on the exchange at a given time. Users typically need to hold their funds on the participating exchange at the specified block height or over the specified time period. The amount distributed to each address usually correlates with the total ownership the address has during the time period.
1.2 Wallet Airdrop
For instance, on September 4, 2017, all ETH holders were airdropped OMG tokens. The distribution was based on 5% of the total ETH supply, divided by each wallet's ETH holdings. The OMG tokens were automatically distributed to each ETH address. However, ETH holders who stored their assets on an exchange did not receive any OMG tokens, as they did not control their private keys to receive them - a reminder of the importance of controlling your own private keys.
* All terms and definitions may update as the Cryptionary improves.
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