What is an airdrop?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
An airdrop is a project distributing tokens free of charge to users who meet some criterion, usually to seed adoption or widen early distribution. It is also a heavily abused term: the act of 'claiming' one can itself be the attack.
Key points
- Free token distribution to users meeting a condition
- Used to seed adoption and widen distribution
- Fake claim flows are a common attack
- Receipt can itself be a taxable event
Definition
A distribution in which a project sends tokens to addresses meeting defined criteria, without charge.
Criteria vary: addresses that used a protocol, held a balance, or joined a testnet. They are usually based on activity in a period that has already closed, so trying to qualify after the announcement rarely works.
The classic scam is a token you never asked for appearing in your wallet; trying to sell it leads to a lookalike site that asks you to connect and approve, and the approval hands over the right to drain your other assets. The safe response to an unexpected token is to leave it alone.
Tax treatment also deserves attention. In Japan, crypto assets received are generally recognised as income at their value when received. If the token's price falls afterwards, you may still be assessed on that earlier value — so keep records of what arrived and when.
Watch out for
- · Leave unexpected tokens untouched — trying to cash them out is how people get drained
- · 'Send gas to claim your airdrop' is a scam pattern, not a legitimate flow
- · Receipt may be taxable, so record what arrived, when, and at what value