In this article, we will take a closer look at the role of the so-called “airdrop hunter”, better known in its Anglo-Saxon version as the “airdrop hunter”, who moves within the crypto landscape.
Their job is to seek out specific projects that have (or might have) planned to distribute a cryptocurrency to their community in order to reward their support during the initial launch phase.
Airdrops are a true corporate marketing strategy: a kind of ad hoc incentive campaign designed to boost user traffic within certain decentralised platforms, essentially by giving away cryptocurrencies to stakeholders.
In recent years, this crypto activity has become increasingly popular, with more and more individuals turning this speculative practice into a real job, given the four-figure earning opportunities that various projects have offered in the past and will offer in the future.
However, not all that glitters is gold: airdrop hunters expose themselves to major cybersecurity risks and also have to bear some costs for the blockchain transactions they regularly carry out.
What is an airdrop hunter and how do they make money in crypto?
The term “airdrop hunter” is used to describe an individual who periodically benefits from special incentive campaigns launched by certain projects in the crypto landscape.
In fact, many decentralised applications or blockchain infrastructures, in order to launch their own cryptocurrency, decide to use this marketing practice by attracting as much user traffic as possible, promising them a reward for their support.
This trend started in 2020, when the decentralised exchange Uniswap announced that it would donate part of the initial supply of the new UNI token to all those who had used the platform by making at least one swap.
From that moment on, more and more partners, applications and crypto networks started to use the airdrop technique as a strategy to obtain a return in terms of user traffic and, indirectly, in terms of commissions for carrying out on-chain transactions (for example, to make a swap on Uniswap, one pays a 0.3% commission to the platform).
Projects such as DYDX, Ens Domains, Arbitrum, Optimism, Aptos and Yuga Labs have given away money in crypto to many users over the past three years, sometimes earning more than $100,000.
In practice, what an airdrop hunter does is ‘simply’ use a particular blockchain-based product repeatedly over time to be labelled an early adopter and contribute to the initial success of the decentralised infrastructure.
Earned tokens can be airdropped, or sent, directly to the eligible person’s non-custodial wallet, or sometimes must be redeemed on specific platforms.
However, this profession is not for everyone: before you start, make sure you understand all the risks involved in the world of cryptocurrencies and learn the basic concepts of web3 and DeFi.
The pros and cons of the profession
As with anything, airdrop hunting has its pros and cons.
On the positive side, you can earn a high gross income (often over $500-1000 per airdrop) for little effort and a few hours a day or week.
Basically, you can work smart, covering as many protocols and blockchains as possible in the shortest amount of time and wasting as few resources as possible.
Making money from airdrops is also the best way to start investing in the crypto world if you do not have a lot of seed money.
Another advantage is the fact that you almost never have to provide your personal information to participate in these incentive campaigns.
On the contrary, most of these processes take place in a trustless manner, without the use of trusted intermediaries, but with the sole help of the blockchain.
However, when it comes to the downside of trying to succeed with airdrops, there are several negatives to consider.
Firstly, interacting with a large number of smart contracts and platforms often exposes us to a high risk of our non-custodial wallet being compromised, resulting in the loss of all crypto funds held in it.
In order to deal with this activity in a professional manner, one needs to take a number of security precautions, such as removing all old contract authorisations that we no longer use (on Revoke), using alternative wallets for holding, or simply being cautious and careful when trading.
Then, contrary to what many people believe, getting an airdrop reward is rarely free and you will need at least $50-100 to try and qualify.
Part of these funds have to be spent on paying commissions for operating on the various blockchain infrastructures (usually no less than $20-30 between gas and price spreads).
In addition, unfortunately, the criteria by which crypto projects that want to distribute a coin choose who to pay vary from time to time, and it is not always possible to make the desired profit.
Having a guaranteed profit is impossible, but you can increase your chances of being considered by doing as many on-chain actions as possible (at a higher cost of operation).
Finally, it should be noted that it is not always possible to make a living from airdrops: a high initial capital (at least USD 20,000) is required to earn large sums of money, and the timing of the distribution of new tokens is not known to the public.
For example, you may not receive any rewards for months, only to receive 3 consecutive airdrops in a short period of time.
How to maximise crypto income from airdrops
Now that we have understood the profession of the airdrop hunter and all the rewards and risks associated with it, we can move on to the final part, where we will give some (non-financial) advice on how to increase the likelihood of making consistent crypto profits.
First of all, it is essential to practice in the world by studying all the different DeFi mechanisms and acquiring different skills, such as analysing the tokenomics of a token, using AMM, protecting data on the blockchain, etc.
Then it is essential to follow the X-accounts of experienced users of this world who publish their strategy with each airdrop: we cannot expect to keep up with all the new airdrops that appear every day, choosing the right sources is more important than choosing the projects themselves.
Many parties publish ‘alphas’, which are step-by-step guides to what you need to do to get the reward from a project.
The best X-profiles in this respect are “Airdrop Official”, “Chase”. “Ardizor”, “Alpha Drops” and “Mingo Airdrop”.
You can also keep up to date by following The Cryptonomist column, which analyses a different topic or project each week.
Another way to increase your profits is to use multiple addresses when “farming” an airdrop.
For example, if you can get $1,000 from one wallet, you can get $10,000 from 10 wallets (all things being equal).
It is usually a good idea to spread your funds across multiple addresses, splitting the initial investment equally. However, this requires a greater commitment in terms of time to be eligible.
In addition, if you are ‘cheating’ the system by using multiple wallets, you will need to take certain precautions to avoid being labelled a “Sybil”, i.e. a user who is unethically trying to make more profit than they are entitled to by using multiple wallets.
As a general rule, it is highly advisable to transfer funds from one address to another without going through a decentralised exchange or mixer, to perform the same operations between two addresses at the same time, and to log in from the same IP address (at least when making the various claims in the case of eligibility).
Other small suggestions include:
- try every new chain as soon as it arrives on the mainnet
- download a multi-signature wallet such as Safe and use it occasionally
- always keep a minimum of 0.05 ETH in your wallet
- Make at least one grant on Gitcoin.