An airdrop is when a company gives out free cryptocurrency or NFT to people who already own some of their tokens.
The Long Explanation
Usually, this is done for promotional purposes or to reward an already existing community. They do this to try and get more people to buy their tokens, or to get people to start using their blockchain network.
To get the free token, there are specific conditions to be eligible. That may be holding a certain amount of tokens or specific NFTs in a public wallet that the company can see at a set time (snapshot time).
Airdrops are also used to increase the price of an NFT collection if it has become more popular.
Examples of airdrops:
- NFT marketplace LooksRare gave out free LOOKS tokens as part of their initial launch. Anyone who has used Opensea marketplace over a six-month period (from Ethereum Block 12642194 on 16th Jun 2021 to Block 13812868 on 16th Dec 2021) was elligible.
- People who’ve traded on OpenSea before January 1st, 2022 were eligible for the X2Y2 NFT marketplace airdrop