Airdrop: An airdrop is an unsolicited distribution of a cryptocurrency token or coin, usually done for free, to numerous wallet addresses.

Purpose: Airdrops are primarily used during the launch of a new cryptocurrency or a DeFi protocol. They help gain attention and new followers, which results in a larger user base and a wider disbursement of coins.

Types of Airdrops: There are four types of airdrops, each with its own set of requirements and goals:

- Standard Airdrop: Participants express their interest in receiving an airdrop and provide a valid wallet address.

- Bounty Airdrop: Users perform certain tasks, such as raising awareness of a project through various channels.

- Holder Airdrop: Participants hold a certain amount of existing coins or tokens in their wallets to qualify for the tokens.

- Exclusive Airdrop: Participants are selected or invited by the project team or partners to receive the tokens.

How Airdrops Work: A crypto airdrop usually involves the following steps:

- The project team communicates the details and requirements of the airdrop through their official channels or cryptocurrency communities.

- The interested participants register for the airdrop by providing their wallet address and other information or performing the required tasks.

- The project team verifies the eligibility and validity of the participants and distributes the tokens to their wallets according to the rules of the airdrop.

- The participants receive the tokens in their wallets and can use them according to the terms and conditions of the project.

Safety Measures: Despite their popularity, crypto airdrops aren’t always risk-free. Because recipients receive tokens or coins in their wallets, there will be airdrops that are nothing more than pump-and-dump schemes. Therefore, it's crucial to do your due diligence before participating in a crypto airdrop.

Example: In 2020, Uniswap launched its native token, UNI, and decided to airdrop 400 UNI to every wallet that had used its decentralized exchange service. At the time, the airdrop was worth around $1200, but the value of UNI has since skyrocketed, making this airdrop one of the most lucrative in crypto history.