“Money doesn’t grow on trees. It falls from the sky!” - Science
In the face of this week’s market volatility, we all deserve some happiness. And what brings more happiness than free money? Yes, that’s right: nothing at all.
In 2020 Uniswap airdropped 400 UNI tokens to eligible accounts (those which had performed at least one transaction prior to Sept. 1, 2020). That works out to around $8,000 today.
This isn’t the only case in which users were highly rewarded for their early adoption. In 2018 Ontology airdropped 1,000 ONT to people who just signed up for its newsletter! When it comes to mostly passive income, airdrops are hard to beat.
That’s why we dedicate today’s main topic to airdrops 🤝
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Our Market Meditations are longer format educational segments. Each letter features a Market Meditation which will deep dive and analyse a relevant crypto event, theme or tool.
🪂 Airdrops Keep Fallin’ on My Head
In January, we called attention to what was still a relatively new concept at the time: Airdrops on decentralized exchanges. In fact, some of the airdrop opportunities we mentioned did occur! Such as the surprise dYdX airdrop; if you were a subscriber at the time and took action, congratulations!
Over the course of this year, airdrops have changed considerably and are now much more widespread. Rather than qualifying by participating in transactions or holding currency on certain platforms, eligibility is now as easy as retweeting and following a few social media outlets.
🪂 What is an Airdrop?
Airdrops are marketing strategies used by cryptocurrency projects to boot-strap awareness by giving away tokens or NFTs to participants. There are three main reasons why projects give away tokens:
The primary purpose is to create awareness for blockchain start-ups. They usually precede IDOs and have proven effective in increasing the visibility for these initial offerings.
Another benefit of the airdrop system is the decentralized nature of its distribution. By randomly selecting recipients from a pool of qualified entrants, awards are naturally spread out among a predetermined number of winning wallets.
Sometimes airdrops are used to reward users. In an effort to retain users, some platforms have airdropped considerable rewards to those people who hold coins for a specific duration or have conducted transactions for a certain amount.
🪂 What’s the Catch?
As in all things, a little good judgement goes a long way. Recklessly sharing your wallet address, social media accounts, or other quasi-personal information could have some unintended consequences.
Phishing and dusting attacks are two such concerns which should be considered before diving headfirst into the airdrop army.
You may want to create and designate a separate wallet (such as a MetaMask) just for airdrop participation to avoid these security concerns.
Compartmentalization is key. Keeping your main wallet as private as possible is always best practice.
Luckily for us, CoinMarketCap has shouldered a lot of the burden when it comes to researching these potentially lucrative projects.
The easiest way to responsibly find and participate in airdrops is using CoinMarketCap’s Airdrop page. Here you can find a list of both ongoing and upcoming programs in which to enroll. Today, there are over 40 combined ongoing and upcoming airdrops ripe for the picking. With new airdrops popping up almost every day, your odds of receiving some promotional payout doesn’t look too bad.
Get started by viewing CoinMarketCap’s definitive guide to airdrops.
🪂 Extra Considerations
🚦REMEMBER: not all airdrops are announced. As we always say, it is exponentially beneficial to be an active member of the crypto community. Engage with projects, protocols and not only will you connect with like minded people and learn more but you might find a nice airdrop landing your way!
✅ TIP: with so many rewards to be gained by simply using a protocol once, there are sharks that have been trying to game the system by creating hundreds of addresses that could potentially all qualify as a separate airdrop, amounting to potentially $100,000+.
To avoid this kind of frontrunning, some projects set a minimum requirement in order to qualify. Keep this in mind on your search for airdrops. For instance, when it comes to protocols try buying/selling at least $50-100 worth of an asset so you don’t end up below the threshold.
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💸 Know Your Arbitrage
What is the Coinbase Premium?
There is a higher volume of crypto being traded on Coinbase compared to other platforms
Crypto prices can end up being higher on Coinbase compared to other platforms
Coinbase trading fees can be higher than other platforms
🏹 Money Talks - Crypto Wallets Coming to Robinhood
Robinhood got a lot of publicity earlier in the year with the whole Gamestop and AMC fiasco. They stayed in the news and retained many customers because they announced they would be trading doge on their platform.
Robinhood was a popular destination for most because of the low fees and little money needed to get started. Soon thereafter, many new crypto enthusiasts found out that while they were getting exposure to the price of their coins, they did not actually own their coins!
In a blog post on Wednesday, Robinhood announced that they would begin to test crypto wallets next month. Some important information to know:
Next month some customers will try crypto wallets.
Robinhood shares rose 10.9% after announcing this news.
Last quarter, over half of Robinhood’s transaction-based revenue came from crypto trading.
Though a select few will get to test the crypto wallet next month, Robinhood said that “After [feedback], we will continue to roll out access to more and more customers through our waitlist.”
You can join the Robinhood waitlist for crypto wallets here. This is great news because it means another step forward to owning your coins. While some may debate with the slogan “not your keys, not your coins,” at least you will now be able to transfer your crypto to another wallet if you wish.
Robinhood may have a bad reputation according to some for a variety of reasons, but crypto wallets are a step in the right direction. Regardless of your feelings toward Robinhood, they do cater to a more distinct population than do most exchanges. This will allow customers to interact with other crypto projects that they were not privy to before crypto wallets!
2. Crypto prices can end up being higher on Coinbase compared to other platforms
Coinbase is amongst the most trusted exchanges in the world (particularly in North America because it is based in the USA and therefore subject to high regulation). There is a lot of institutional demand for Bitcoin on Coinbase. So much so that crypto starts to trade for a premium on the exchange (BTC price can end up being high on Coinbase compared to other platforms). And so, a common arbitrage method is to buy BTC on another exchange and sell it on Coinbase for a profit.
If you're interested in finding out more about crypto arbitrage and how you can do it, click here.
🌎🧘♂️✍️ Stories in this newsletter were written by Kyle F., Misael Calleja, Nick T., Max P., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Gerasimos P.
Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.
Disclosure. Some of the links we’ve included are affiliate, they give you rewards and discounts and earn us a commission. Additionally, the Market Meditator writers hold crypto assets. See our investment disclosures here.