How to Find Retroactive Airdrops and Get Paid in Crypto

Last updated on June 14th, 2023 at 01:53 pm

Crypto airdrops present an exciting opportunity to earn cryptocurrency with little to no cost. It’s more like stumbling upon money on the street, only this time, on crypto streets. The best part is that you don’t need any technical or trading skills, and the rewards can be substantial. In fact, active users in the decentralized finance (DeFi) space can earn anywhere from a few hundred dollars to even six figures through airdrops.

So, what exactly is an airdrop? Essentially, it refers to the free distribution of tokens to users of a project following the launch of its native tokens. This is typically done as a prelude to the project’s initial coin offering (ICO). Airdrops are often part of marketing strategies designed to attract larger audiences and grow project user bases.

Developers are constantly creating new cryptocurrency projects to meet the market’s growing demand. As more blockchain projects adopt community-led approaches such as Decentralized Autonomous Organizations (DAO), developers are actively researching ways to airdrop governance tokens to legitimate community members. One of these developments is a modification of the traditional airdropping process – retroactive airdrops. 

Retroactive airdrops redefine the dynamics of airdrops and who benefits from them. In this case, merely being aware of an upcoming airdrop is not sufficient. Instead, being an early adopter of DeFi innovations guarantees access to lucrative rewards.

This article comprehensively examines retroactive airdrops, what they are, how to participate in them, why they are popular, and whether they are worth pursuing. Let’s get started.

What is a Retroactive Airdrop?

Retroactive airdrops differ from traditional airdrops in that they reward early community members after the project’s launch, rather than random users before the project’s launch. The primary objective of retroactive airdrops is to distribute project tokens to members of the community who have actively contributed to its development.

Retroactive airdrops target specific wallets that meet certain criteria, such as the Uniswap airdrop in September 2020, which distributed 400 UNI tokens to 12,619 user accounts.

Uniswap introduced a novel approach by launching tokens and airdropping them to users who had previously engaged with the protocol. This distribution of free tokens proved to be immensely successful, and contributed to the widespread adoption of Uniswap as the world’s leading decentralized exchange (DEX).

Types of Retroactive Airdrops

Retroactive airdrops are conducted in various ways depending on the preferences and requirements of each project. However, they all have a common purpose: to reward long-term users of blockchain ecosystems and DeFi protocols.

Below are the types of retroactive airdrops that have been observed so far:

1. Snapshot airdrops: These airdrops rely on on-chain data to identify eligible wallet addresses. To qualify for a snapshot airdrop, users typically need to hold a minimum amount of tokens and complete a specified number of on-chain transactions. The project team determines when a snapshot of the chain’s data will be taken and sets the requirements that users must fulfill by that time. 
2. Community airdrops: Project teams may choose to reward their community members through community airdrops. These airdrops aim to recognize and appreciate community members who actively participate in community programs and complete specific tasks over time. In some cases, participants who actively engage in on-chain governance may also become eligible for community airdrops.
3. Event-based airdrops: When a project achieves a significant milestone, the project team may decide to reward community members who have been part of the project for a specified period. Event-based airdrops serve as a way to acknowledge and incentivize the ongoing support and involvement of community members.
4. Fork airdrops: Fork airdrops usually compensate owners of an existing token from which a new token is created. For instance, on August 1, 2017, Bitcoin Cash (BCH) was formed as a fork of Bitcoin (BTC), which enabled all BTC holders at that time to be eligible for an allotment of BCH. 
5. Token swap airdrops: In cases where a project team replaces an existing token with a new one, they may choose to automatically distribute the new tokens to wallets holding the previous token. This process, known as a token swap airdrop, ensures that the new token becomes the only tradable token following the swap.

Why Are Retroactive Airdrops Popular?

The increasing popularity of retroactive airdrops can be attributed to the following factors:

Creation of FOMO (Fear of Missing Out)

Marketers leverage people’s emotions by stressing the limited nature of certain opportunities. Crypto tokens are no exception to this, as they often generate a Fear of Missing Out (FOMO) effect. The limited supply resulting from a retroactive airdrop creates heightened demand, leading to the emergence of a market for the project. 

This establishes the tokens’ value and the industry’s demand for them, making trading them a profitable endeavour. For instance, the recent distribution of ARB tokens has been associated with increased adoption and a surge in on-chain activity on newly launched Layer 2 solutions such as Starknet and zkSync.

Rewarding early supporters

Offering incentives is a great way to get people interested in a product launch or promotion. In the case of retroactive airdrops, early supporters are rewarded with free tokens, which they can later sell for a profit as their value appreciates. This serves as a compelling way to acknowledge and reward a project’s most loyal customers.

Attracting supporters of other projects

Through backdated airdrops, projects can entice participants from rival projects to join their ecosystem. Users often have preferences for specific tokens based on factors like utility, composability, visual aesthetics, user-friendly interfaces, or existing holdings in their portfolios. By strategically leveraging retroactive airdrops, projects can effectively poach supporters from other products. 

Top Retroactive Airdrops (2020-)

Below is a compilation of significant retrospective airdrops that have occurred over the past few years.

Uniswap

In September 2020, Uniswap, an Ethereum-based decentralized exchange (DEX), conducted a retroactive airdrop of 150,000,000 UNI governance tokens to its existing users. Qualified users were able to claim their airdrop on Uniswap’s official website until May 2021.

Unfortunately, some influential community members missed out on this opportunity because they accessed Uniswap through Dharma, a lending protocol that concealed their identities from Uniswap’s credit scoring system. 

To rectify this mistake, Dharma’s CEO, Nadav Hollander, proposed a backdated airdrop of UNI tokens as an apology. The proposal was put to a vote using Uniswap’s decentralized governance mechanism but fell short of the required 40 million votes for consensus. Despite majority support, the proposal received 37.5 million votes, which was insufficient for it to pass.

1Inch

On December 25, 2020, 1Inch launched its native token (1INCH) and airdropped 90 million 1INCH tokens to eligible wallets. Users who had utilized the DeFi aggregator before September 15, 2020, and completed a transaction volume of at least $20 qualified to claim the airdrop.

Following the initial airdrop to its community, 1Inch carried out subsequent airdrops, including one in which 1Inch tokens were distributed to users of Uniswap who had not used the 1Inch aggregator or Mooniswap DEX. The CEO of 1Inch confirmed that this was a marketing strategy aimed at expanding the 1Inch community.

dYdX

In August 2021, the dYdX exchange announced an airdrop of its native token (dYdX) to early platform users. The exchange distributed 75,000,000 dYdX tokens to its community. A total of 64,306 unique wallets qualified for this airdrop, receiving varying amounts of dYdX tokens ranging from 310 to 9,529 tokens. At the time, these tokens were valued between $3,000 and $100,000. Eligible wallets were able to claim their dYdX tokens starting from September 2021. This airdrop proved highly lucrative for long-term traders on the dYdX platform.

ENS

In November 2021, the Ethereum Name Service (ENS) protocol announced a retroactive airdrop for its community. Over 137,000 wallet addresses associated with the ETH domain were eligible to claim ENS tokens. A total of 25,000,000 ENS tokens were available for claiming between November 2021 and May 4, 2022. This airdrop marked a groundbreaking event as the first of its kind from a name service protocol.

Arbitrum

On March 21, 2023, the Arbitrum ecosystem made a significant move by transitioning into a decentralized autonomous organization (DAO). As part of this transition, the network conducted an airdrop of 1.275 billion ARB tokens to early adopters. Qualified wallets had up to six months from the distribution date to claim their ARB tokens.

This airdrop stands as the largest one in 2023 thus far, with the minimum eligible wallet receiving 625 ARB tokens, currently worth $918. It is worth noting that the number of tokens received varied based on the user’s level of involvement in the network.

Typically, retroactive airdrops are not publicly announced until they have been received by users of the respective protocol or ecosystem. However, there are identifiable patterns that often precede these airdrop announcements. This enables proactive individuals to anticipate and prepare for such events.

You can employ the following methods to discover new retroactive airdrops:

Research new projects

Various blockchain ecosystems and DeFi protocols serve specific functions, such as privacy solutions, NFT trading support, stablecoin lending, and more. Keeping tabs on new projects allows you to track their progress and potential rewards over time. 

1. DeFi Projects: When researching a DeFi project, it is important to verify if they have plans to launch a token. Even if a project does not explicitly announce an airdrop or token launch, that shouldn’t discourage you. The DeFi space offers numerous opportunities, and there will always be potential prospects in the future.

1. Layer 1 Protocols: Layer 1 protocols often present opportunities to receive free tokens through airdrops. When new Layer 1 protocols launch, they often come with their native token. For instance, Aptos, a public blockchain, launched its APT token on the same day the blockchain went live. Users who had minted an NFT on the Aptos testnet network were eligible to claim 150 APT tokens, valued at $1197 at the time of writing.
   
   Notably, this airdrop did not require any financial investment, as the qualifying activities were conducted on a testnet network. As upcoming Layer 1 protocols like Sei and Venom prepare to launch, they may adopt a similar approach of distributing their native tokens to testnet users when their blockchains go live.

1. Layer 2 Protocols: If you’re researching Layer 2 protocols that have not yet released their tokens, it’s crucial to determine whether they plan to distribute their tokens through a community airdrop. Once you’ve identified such ecosystems, you can compare them to others in the same category to evaluate their potential. 

For instance, let’s consider Optimism and Arbitrum, both of which are Ethereum Layer 2 scaling solutions. In the past, Optimism airdropped its OP token to users who had bridged into their ecosystem and completed transactions. Similarly, when Arbitrum launched its token, it followed a similar process, rewarding Arbitrum users who claimed the airdrop with valuable ARB tokens.

You may want to explore upcoming ecosystems that compete with Optimism and Arbitrum, e.g., Starknet and zkSync, as they don’t have native tokens yet and may choose to distribute their tokens through community airdrops.

• Blockchain Name Services: Blockchain name services offer an innovative solution by replacing complex wallet addresses with user-friendly names that are easy to remember. An excellent illustration of such a name service operating on the Ethereum network is ‘Vitalik.eth’. This approach significantly improves the representation of wallets, eliminating the need for lengthy combinations of numbers and letters.
  
  The 2021 Ethereum Name Service (ENS) airdrop stands out as one of the largest airdrops ever witnessed in the cryptocurrency industry, with recipients receiving up to five-figure payouts. This achievement prompted other name service protocols to follow suit by creating DAO tokens and distributing them to their name service holders. 
  
  More recently, SpaceID launched its token and freely distributed a portion of the supply to users who purchased “id.bnb” and “id.arb” domain names from the platform. SpaceID is currently conducting another round of airdrops. There are speculations that future airdrops from blockchain name services may originate from the Aptos Name Service, an official project by Aptos Labs.

1. NFT projects: Minting high-value NFTs can present opportunities to receive free tokens. A notable example is the Bored Ape Yacht Club (BAYC) community, which formed a decentralized autonomous organization (DAO) and distributed 62% of the total ApeCoin (APE) supply, the project’s native token, to BAYC NFT holders. The value of this airdrop ranged from four figures and above. 

However, earning free tokens through NFTs extends beyond just minting. Blur NFT marketplace, for instance, rewarded early platform users with an airdrop of over 300 million BLUR tokens. Blur is also planning another airdrop to attract new users to its marketplace. This second airdrop has yet to be distributed at the time of writing.

Focus on projects with positive revenue

Projects that struggle to generate enough revenue to keep their operations running are unlikely to distribute free tokens, especially in large quantities. 

As a result, it is best to prioritize and engage with ecosystems and protocols that have a strong revenue stream and can operate on a large scale. This increases your chances of receiving airdrops as a result of your active participation in the project. One of the most effective strategies for capitalizing on cryptocurrency opportunities is to focus on projects with sufficient cash flow or liquidity.

Interact with new ecosystems and use protocols

Users who actively participate in a crypto project’s ecosystem stand a higher chance of receiving airdrop rewards. Recently, the ARB token airdrop distributed rewards to wallet addresses based on a points system that measured their level of involvement in the network. 

Participants with the highest points were awarded 15,000 ARB tokens, currently valued at $21,750. This serves as a confirmation that genuine interest and engagement within an ecosystem can lead to significant rewards. 

Airdrop farmers not only seek to receive airdrops from newly launched ecosystems but also strive to earn airdrops from any protocols developed within those ecosystems.

Seek projects in need of feedback or currently in their testnet phase

Retroactive airdrops are commonly used by newly launched projects in their beta phase to attract early adopters. Essentially, this incentivized testnet process involves rewarding users for providing feedback or reporting problems encountered while testing the product. ICPSwap conducted one such retroactive airdrop to assist developers in making the platform more user-friendly. 

Join and engage in online communities

Individuals interested in participating in retrospective airdrops can connect with like-minded enthusiasts through online forums such as Twitter, Discord, and Reddit. These communities often house experienced members who can offer valuable insights to help others maximize their engagement with airdrop opportunities.

Follow news/announcement channels 

Specific social media and cryptocurrency news platforms serve as valuable resources for individuals interested in retroactive airdrops. Users can avoid missing out on airdrop opportunities by following these reputable channels:

1. Airdrops.io: offers the latest information on airdrop events and the potential rewards they offer.
2. Boxmining: provides industry news and announcements specifically related to airdrops.
3. AirdropAlert.com: specializes in scanning social media platforms for airdrop opportunities. 
4. Etherscan Airdrop: If you are specifically interested in Ethereum (ETH) airdrops, Etherscan Airdrop is a trustworthy source to follow.
5. Defillama: focuses on providing news and updates regarding airdrops in blockchain ecosystems. 

Is Retroactive Airdrop Farming Worth It?

Retroactive airdrops can be highly lucrative. Essentially, you are rewarded simply for using a protocol or blockchain. Just imagine receiving free money for using your favourite decentralized exchange. Sounds good on any day! 

Retroactive airdrop farming involves actively participating in various DeFi protocols and blockchain networks with the intention of receiving rewards at a later date. 

The concept revolves around finding DeFi protocols or blockchain networks that are yet to launch their native tokens and transacting on them (i.e., trading, minting, staking, lending, etc.). Individuals who engage in this activity are known as retroactive airdrop farmers. 

Here are some reasons why retroactive airdrop farming may be worth considering:

Huge Potential for Substantial Rewards

Crypto airdrops offer a tremendous return on investment, with rewards often outweighing the time and resources invested by airdrop farmers. For instance, in the dYdX token airdrop, users who made at least one deposit and traded on the exchange were eligible for a four-figure airdrop. Accumulating a couple of such airdrops could lead to life-changing financial gains for participants.

Ease of Execution

Participating in retroactive airdrops does not require any additional skills compared to other methods of earning money in the crypto space. Take the example of Uniswap’s UNI token distribution, where even wallet addresses that had failed interactions with the Uniswap smart contract qualified for the 400 UNI token airdrop.

In essence, this could be seen as a reward for minimal effort. In certain cases, simply conducting basic swaps and bridging into a new blockchain network could make a wallet address eligible for an airdrop.

Lower Risk Compared to ICOs

Farming retroactive airdrops is a relatively low-risk and cost-effective way to accumulate new crypto tokens. Unlike participating in an Initial Coin Offering (ICO), where you need to invest money to purchase a new token, retroactive airdrops typically don’t require significant upfront investments.

In most cases, gas fees for interacting with a new protocol are the only costs involved. For example, merely possessing a “.ETH” domain, which signifies that an address has interacted with the Ethereum blockchain and paid gas fees at least once, would have guaranteed eligibility for a five-figure reward during the ENS airdrop distribution.

Improved Understanding of Blockchain and Crypto

Farming retroactive airdrops requires a basic understanding of blockchain technology and crypto ecosystems. By actively engaging with new blockchain networks and decentralized finance (DeFi) protocols, airdrop farmers get the chance to expand their knowledge of industry trends and seize early earning opportunities.

Tips for Safely Farming Retroactive Airdrops 

Below are some tips to ensure your safety while farming retroactive airdrops:

1. Use a New Wallet: It is best to use a separate wallet, not your main wallet, for retroactive airdrops because you may be interacting with multiple smart contracts. Smart contract vulnerabilities can be exploited to compromise connected wallets, but using a separate wallet for airdrops reduces the risk of losing your funds. If you prefer to keep using your current wallet, consider moving your funds to a new wallet dedicated to retroactive airdrop farming.
2. Keep Sufficient Gas Fees: To interact with DeFi protocols and blockchain networks, you’ll need to allocate a small amount of crypto for gas fees. Sometimes, you may need to bridge across different blockchain networks. If you lack the necessary resources to farm retroactive airdrops on the Ethereum chain, known for its high gas fees, you can explore other Layer 1 or Layer 2 solutions that offer comparable profitability. Using the rewards from these alternative chains, you can still interact with the Ethereum network.
3. Invest Only What You Can Afford to Lose: It is important to remember that retroactive airdrops are primarily speculative, and rewards are not guaranteed. Therefore, it is advisable to only invest funds that you are willing to lose in the process. Avoid allocating all of your investments solely towards farming retroactive airdrops.
4. Select Protocols and Networks Associated with Significant Events: Opt for DeFi protocols and blockchain networks that are associated with significant events. This not only increases the likelihood of receiving rewards but also ensures that the rewards received are commensurate with your time and resources. Conduct thorough research and engage with unique projects that have yet to launch their tokens.
5. Increase On-Chain Activity: Retroactive airdrops often favour users with high on-chain activity, as they tend to receive larger crypto rewards. To enhance your chances of eligibility for a retroactive airdrop, aim to be an active user of the protocol or blockchain network. Regularly using the platform also demonstrates that you are a real person and not an automated program or bot.

Risks Associated with Retroactive Airdrops

While retroactive airdrops can be rewarding, they come with certain risks. By being aware of these risks, individuals can make informed decisions regarding their involvement in retroactive airdrops and take necessary precautions to protect themselves from potential harm. These risks include:

1. Potential Waste of Time and Resources: Participating in a retroactive airdrop requires a significant investment of time and resources to fulfill all the necessary criteria. However, there is a chance that the airdrop may never happen or that you may not meet the criteria, resulting in a complete waste of your time and resources.
2. Scams and Frauds: Bad actors recognize the hype around retroactive airdrops and may leverage it. They might create fraudulent protocols or blockchain networks and deceive people into investing their money. If you are not cautious, you may mistake these scams for legitimate projects and end up losing your money to these scammers.
3. Bugged Smart Contracts: Retroactive airdrop farmers often engage with new protocols to receive early adopter rewards. This means they may occasionally interact with smart contracts that have not undergone comprehensive audits. Since unaudited protocols are more likely to contain vulnerabilities, retroactive airdrop participants face a high risk of losing their funds in the event of smart contract exploits.

In Conclusion,

• As new DeFi protocols and blockchain networks introduce their products, they strive to attract and incentivize a large number of users, often through airdrops. 
• Retroactive airdrops offer a reliable method to profit from the cryptocurrency market, provided you know where to look. 
• Each type of retroactive airdrop serves a unique purpose and rewards different user behaviours or contributions within the project. By implementing these airdrops, projects can foster user engagement, loyalty, and active participation while fairly distributing tokens to deserving community members.
• As new DeFi protocols and blockchain networks launch their products, they find ways to attract and reward the most network users, mostly through airdrops.
• Simply being early to a new protocol may be your ticket to making your easiest six figures in the crypto market. Who knows, your favourite DeFi or NFT protocol might surprise you by airdropping free tokens your way in the near future.

DISCLAIMER: This piece is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.

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