Crypto airdrops help fledgling blockchain-based projects grow.

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Their roots bind community members together with rewards and a shared purpose.

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They:

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• Create a ‘skin-in-the-game’ interest in a project’s success
• Cultivate valuable engagement
• Drive meaningful participation

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Want to hear more about how Blockdaemon can help you with your Blockchain journey? Contact us today to chat more about our blockchain solutions, or read on to get a closer look at what’s new.

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The fruits of a successful airdrop is a stronger community, better project and rewarding experience for end-users. Throughout the years, we have seen lots of airdrops delivered on proof-of-work (PoW) blockchains. Services have even been built to help users find unclaimed airdrops.

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Now, proof-of-stake (PoS) chains support hundreds of crypto airdrops across dozens of networks. With PoS becoming the dominant consensus-paradigm, the number of airdrops on these networks shows no sign of slowing.

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‍Knowing what to do with your stake-based blockchain airdrops is critical as you navigate across the open gardens of web3.

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Blockdaemon is the backbone of many popular PoS blockchain networks. We help secure the networks that issue these airdrops.

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Today, we’ll explain the power of staking your airdrops, and what they mean to you.

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What is a crypto airdrop?

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An airdrop is a crypto token sent by a project to public wallet addresses that meet certain criteria.

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Often, the key criteria is holding the underlying, native currency of the blockchain on which these airdrops are based. Typically, airdropped tokens are fungible and non-fungible assets. These token standards were pioneered by Ethereum, the first chain that let users create their own custom, native tokens.

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Some blockchain projects ‘push’ airdrops to wallet addresses.

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This sends tokens to publicly available wallet addresses without any user input.

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Other airdrops issue rewards which can only be claimed by completing one or more steps. These steps add a net-positive to the project. In this way, airdrops often reward good on-chain user behaviour.

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Three reasons to stake your crypto airdrops

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Strong community participation is key to the success of PoS based networks. Staking lays the responsibility of securing the network at the feet of the token holders themselves. This stands in contrast to the external mining entities seen in traditional PoW blockchains.Staking provides a vital function to the network by participating in consensus.

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Let’s explore the three main reasons you should stake your crypto airdrops.

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1. Rewards

By storing, securing and staking PoS tokens yourself, you open the door to receiving many airdrops. Staking allows you to generate on the native token, while airdrops give you a way to participate in DeFi. Often, airdrops rely on publicly available addresses to issue tokens. These addresses are captured in a network snapshot.

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‍A snapshot, in the context of crypto airdrops, records the balances of accounts on the network at a given moment on time. It is the topographical map of a blockchain’s account landscape.

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‍Crypto stored on exchanges often makes it difficult for dropped tokens to reach the end user, with some custodians not supporting airdrops at all. That’s why it’s important to safely and securely manage your own crypto.

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For example, Anchor Protocol (ANC) is a Terra (LUNA) based project which airdropped tokens to Terra stakers on launch.

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Anchor Protocol airdropped 5% of its supply, fifty million coins in total, to Terra stakers.

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By staking Terra’s natve LUNA token, eligible holders enjoyed an airdrop which excluded non-stakers. Recipients could also then stake ANC to generate rewards in addition to their LUNA staking rewards.  

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‍Blockdaemon is a non-custodial entity that enables staking across all major networks.

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By staking with Blockdaemon, you get best-in-class infrastructure with the potential to acquire airdrops. We help you aid decentralization while you remain in full control of your assets.

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2. Unlock Extra Airdrop Tokens

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By staking your crypto airdrops, you may be eligible to unlock valuable rewards. Some projects require users to stake airdropped tokens in order to claim rewards. Osmosis (OSMO), based on Cosmos (ATOM), is a clear example of this.

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Osmosis allocated 20% of its airdropped tokens to ATOM holders immediately on launch. However, claiming the other 80% required holders to complete four missions.One of these tasks included staking OSMO to a validator.

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This vital step incentivized community members to help secure the network, while claiming airdropped tokens in parallel. While some airdrops don’t require staking to unlock the full amount, staking remains a popular way of generating rewards on tokens. By staking your airdrops, you’ll be helping secure nascent projects and earn rewards for doing so.

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3. Rewarding Governance Participation

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PoS blockchains are the self-sovereign digital democracies of our time.

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Airdrops help shape communities by incentivizing votes in these democracies. Some airdrops only enable holders to vote when they have actively staked their tokens.

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‍In this way, airdrop owners have ‘skin-in-the-game’ to vote in their own best interests.

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‍Airdrops become digital voting cards that align the good of the individual with the good of the project. Anchor Protocol, for example, periodically distributes a portion of its native ANC tokens to stakers to incentivize governance participation.

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‍JET Protocol, a borrowing and lending protocol built on the Solana blockchain, designs its airdrop where staking the token in a dedicated Jet Governance module allows holders to vote on proposals and receive rewards from staking simultaneously.

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‍An engaged community allows for more informed decision making. Airdrops invigorate holders to stake and vote.

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Wrap-Up

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Far from being digital helicopter money, crypto airdrops play a key role in growing early, decentralized projects.

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As the world’s largest blockchain infrastructure provider, Blockdaemon runs the staking infrastructure for many networks on which airdrops are launched.

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Our expertise in operating proof-of-stake nodes on chains such as Cosmos and others help us secure the safety of these networks. Our validator nodes act as the robust backbone for our clients and their services.

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Our support of Evmos, for example, provides reliable infrastructure support for their validators on their network. Evmos has also announced its own airdrop, dubbed the RektDrop. To learn more airdrops, staking and PoS networks, get in touch with us today.