by Trond Vidar Bjorøy
— 1 hour ago
in Contributors Token ​airdrops, which​ ​is​ ​basically​ ​when​ ​a​ ​blockchain project ​decides​ ​to​ ​distribute​ ​free​ ​tokens ​to​ ​the​ ​community, aren’t a new phenomenon in the crypto world. Airdrops became increasingly popular throughout 2017, primarily due to ICO fatigue and increased regulatory uncertainty for token issuers.

Lately, there’s also been a trend towards blockchain startups raising more of their funds through private sales, leaving less tokens available for purchase from individual investors during the public sale, and with some projects even replacing the ICO with a community airdrop altogether. I wanted to find out about the reasons behind these strategies, and potential consequences for the crypto market, so I reached out to Jamie Burke, CEO at Outlier Ventures, a venture firm that specializes in cryptoassets and decentralized web technologies.

Outlier tracks innovations in the token market including ICOs and airdrops and provided me with some new insights. According to data provided by Outlier, one of the most prominent projects to replace their ICO with an airdrop was Byteball — a Direct Acyclic Graph based distributed ledger.

During their airdrop last year, the project simply required individuals to send a signed message from their Bitcoin wallets and took the number of Bitcoins in their balances as an indicator of how many coins should be disbursed to the individual. Equally, another well known project that deployed massive distribution through an airdrop is Stellar who spread 16 billion XLM (Stellar Lumens) to Bitcoin holders in June 2017.

Jamie Burke tells me that while there is a current trend towards increasing airdrops, there isn’t yet anything to indicate that ICOs will be replaced by them entirely. However, he does think they would supplement them, primarily in the case of utility tokens where an initial batch of early adopters are needed to try the product and validate its legitimacy. Read more from thenextweb.com…

thumbnail courtesy of thenextweb.com