Bloq co-founder Matthew Roszak said that airdropping is like giving people free lottery tickets because of the potential for huge rewards. He added that there would be many airdrops this year because of their growing demand in the crypto community.
People who own Neo digital coins were recently selected by the developers of a new cryptocurrency called Ontology to receive free tokens. The original purpose of the free tokens was to give owners voting rights on data services and identity verification.
However, with how airdropping is done, it seems like it’s a marketing scheme that aims to advertise the brand and entice people to use their digital coins. Binance, a Hong Kong-based crypto exchange, was the first trading platform to support Ontology. Experts believe that many more will follow in the next months.
Market research firm Fundstrat Global Advisors said that other brands are also planning airdrops this year. Among them are United Bitcoin, a smart-contract system, and Everipedia, a site similar to Wikipedia and Ethereum’s Callisto Network.
However, it’s still unclear why startups give away such valuable commodities even though they should first prioritize ROI. The Chamber of Digital Commerce Chairman Matthew Roszak answered this question and said that the main reason behind airdropping is promotion.
Roszak is confident that digital coin developers use the method to promote their brand, instead of spending their money on currently-ineffective marketing campaigns like billboards and radio ads.
Reports said that the Ontology airdrop would give away 20 million VCs to Neo owners, which is about 10 percent of their total tokens. Knowing that a single company called OnChain creates these two cryptocurrencies, it’s pretty clear that it’s all about marketing their products at the end of the day.
President of Blockchain Intelligence Group Shone Anstey agreed with Roszak and said that startups want to gain traction as quickly as possible, and the best way to do that is by airdropping. Meanwhile, Spencer Bogart of Blockchain Capital said that market adoption is the main driving force of airdropping. He also noted that airdropping is better than initial coin offerings when it comes to getting people’s attention because it directly puts “money” in people’s pockets.
There are also others that think the purpose of airdropping is to increase the price of existing cryptocurrencies. This is because the value of a cryptocurrency goes up if its demand increases.
In this case, more people will buy Neo in hopes of receiving Ontology coins, and in the process, would help increase the price of Ontology.