NFT Airdrops: A Step-by-Step Guide

September 24, 2022

NFT airdrops are a new marketing sensation providing new ways for brands and businesses to engage with their community. NFT airdrops and the use cases around them are continuing to evolve but by the end of this article, you will have the foundation to capitalize on this new marketing trend. This guide will first cover some basics and then we’ll dive deeper to understand what all the excitement is about!

What Is a Non-Fungible Token (NFT)?

NFTs, branched off from the crypto culture, are unique cryptographic tokens that can represent ownership of anything imaginable such as an encrypted version of an asset in the real world, digital or non-digital collectibles, in-game items like avatars, unique artwork, domain names, fractionalized real estate, tickets that give you access to an event, even a unique sneaker in a limited-run fashion line.

The artwork, Everydays: The First 5000 Days, a collage of 5000 pictures made one per day over more than thirteen years, created by famed digital artist Mike “Beeple” Winkelmann sold for $69.3 million at Christie’s first-ever digital art auction in March of 2021. With investors and collectors’ flush of money that continues to pour money into this space, we’ve seen monthly sales of NFTs holding above US$600 million in recent months and reaching as high as US$4.5 billion in early 2022. The market for new NFTs will likely exceed US$20 billion by the end of 2022.

Everydays: The First 5000 Days

Originally just a fringe activity, NFTs have catapulted into the mainstream crypto culture as another money-making playground. Unlike crypto, which value comes purely from its economic utility as a means of payment or investment. NFTs, on the other hand, have a non-economic value that’s largely driven by perception. This blurs the characteristics of NFTs as part investment, part interest, that are based on personal and market demand rather than financial values.

Several factors are responsible for determining the value of NFTs:

  1. Rarity: demand for an NFT is directly proportionate to its perceived scarcity. The concept of scarcity is most commonly found in collectible or generative art & design which is often used to determine the value of a specific NFT within the collection. Great examples of rare NFTs are the first-of-its-kind artwork from various famous artists, for example, the CryptoKitties or CryptoPunks.
  2. Utility: this is the value or offer that’s attached to an NFT. Two categories of NFTs that have high utility value are tickets and game assets. For example, the Jabbawockeez White Glove NFT ticket collection offered by the tie-up between ticketing platform YellowHeart and MGM Grand Resorts, give holders access to perks such as premium seating, exclusive merchandise, food and drinks credits, and meet-and-greet opportunities.   
  3. Social proof: this indicates what people, in general, think about something. It is people’s interest and how much they are willing to pay for an NFT that drives the price of the asset. The more an NFT project garners demand from the community, i.e. the social proof associated with the project, the higher its floor price.

In NFT communities, the financial self-interest FOMO game is oftentimes amplified even more. Holders of an NFT collection may find it valuable to belong to a locked Discord community wherein savvy investors trade information or provide tips to one another. NFTs hence double as a membership card for holders to cross the “velvet rope” and enter the private club.

Six examples of the 10,000 randomly generated CryptoPunks.

What Is an NFT Airdrop?

If you dabble in NFTs, you’ve likely been airdropped an NFT at some point. Airdrops are an important part of the web3 space. They are generally used as a marketing or promotional incentivization tool to add additional value and utility to their holders or to draw attention to a brand or experience. They allow individuals and brands to foster new relationships, strengthen current ones, generate initial buzz, build a community of users and supporters and increase awareness and adoption of a particular project in a relatively easy and inexpensive way. Airdrops are in general a marketing stunt that involves an unsolicited sending of free coins, tokens, or NFTs to web3 wallet addresses.

An NFT airdrop can be initiated for several reasons. You may receive an NFT for joining a Discord group, signing up for a newsletter or sharing a social media post (standard airdrop), earning exclusive status for being a longtime loyal member of an NFT or web3-related community (exclusive airdrop), or simply holding a certain NFT in your wallet (holder only airdrop). Aside from being a nice gesture, airdrops are remarkably useful for branding. As the NFT collection circulation grows and the number of enthusiastic followers increases, it’s evident that the result of a strategically placed NFT airdrop is greater awareness. After all, the whole idea of an airdrop is to encourage people to embrace projects and boost participation.

An Example of a Successful NFT Airdrop

One of the most well-known examples of an NFT airdrop is the digital vials of mutant serum for Bored Ape Yacht Club, the bellwether for NFTs, holders, where holders of Bored Ape NFTs received an exclusive drop of Yuga Lab’s second project, Mutant Ape Yacht Club. These serums, which came in three distinct levels of scarcity -M1, M2, and M3 transform Apes into Mutant Apes, making the mutant Ape another NFT entirely and giving the holders the opportunity to sell this additional NFT. As of September 20, 2022, the floor price of a MAYC NFT is 14.4 ETH, with the cheapest ape costing nearly US$20,000.

Bored Ape characters used by the creators of the project.

The MAYC collection is built on the foundation of the infamous BAYC NFT collection. It was created to expand the BAYC ecosystem by onboarding new members into the community, giving more people the opportunity to earn tokens, and rewarding existing BAYC NFT holders with a second NFT that’s substantially different but based on Bored Ape traits and characteristics.   

While the BAYC NFT collection has a total of 10,000 NFTs, there are twice as many variants, the mutant apes. The existing BAYC holders were the first to receive the mutant serum airdrop - one serum per each Bored Ape owned. While the rest of the 10,000 mutant apes were released during the public sale. The best way to understand how an NFT airdrop works is to look at the launch and the MAYC mint process.

The inner workings of the MAYC NFT airdrop:

1. The BAYC team took snapshots of all BAYC NFTs prior to the airdrop. BAYC holders were then airdropped a total of 10,000 mutant serum NFTs.

2. BAYC holders had the following options for what they could do with the airdropped serum,

  • Holders could create mutants by combining their Bored Ape NFT with the serum NFT through a smart contract integration by paying the gas fee. This pairing mechanism generated a brand new mutant NFT and burned the serum token alongside. This process does not destroy the original BAYC NFT, and holders now have two distinct NFTs
  • Holders could sell the serum NFTs off for a profit

3. While anyone can purchase and sell serum NFTs, you need to own a Bored Ape NFT in order to apply the serum. Therefore, anyone looking for minting the mutant apes would have to invest a significant amount of money in purchasing the Bored Ape NFT and the serum NFT. The other option is to purchase the mutant ape NFT directly from the secondary marketplace without going through the minting process.

As of September 22, 2022, the cheapest Mutant Ape is priced at 14.94 ETH.

How To Use an NFT Airdrop For Your Business?

  1. Create brand awareness

An NFT airdrop represents another form of building brand awareness. It’s an innovative way of brand storytelling and audience interaction through the features and characteristics encoded into blockchain smart contracts that add extra value to the holders. With an NFT airdrop, businesses can achieve significant brand exposure and increase their chances of attracting new customers.

  1. Build communities

An NFT airdrop is a great alternative to traditional social media for businesses looking to connect with their community. NFT airdrops allow for an additional touch point and could give holders access to certain products or services not available to the general public.

  1. Generate revenue

Businesses can benefit from implementing an NFT airdrop that encourages or incentivizes purchases. The NFT could be given away as a freebie or they can be created to include resale royalties which give the creators a percentage of the sale price each time the NFT is resold. The average NFT royalty typically ranges from 5-10%. 

  1. Play-to-earn for ecosystem expansion

NFTs are highly integrated into the gaming industry. NFT airdrops could be used when gamers reach a certain level or earn in-game accessories. There are now marketplaces dedicated to gamers that allow them to buy and sell their earned NFTs. This results in an ecosystem that allows businesses to develop more digital assets such as game characters, virtual real estate, etc.

  1. Rewards for doing actions

An NFT airdrop can be used as a reward for doing certain actions, for example, referring friends or completing social actions. Gamification is often used as a tactic in referral programs with the top referrers getting airdropped substantially higher value NFTs than the rest of the participants.

How To Do an NFT Airdrop?

NFTs are going to become integrated into nearly all aspects of our lives. As the NFT space grows, businesses and creators are finding more creative ways to build NFTs and perform airdrops. While this article isn’t about creating NFTs, there can be some crossover between the creation and the airdrop itself. You’ll want to consider: What blockchain and marketplace will you use to mint and sell your NFTs? What will the format and content of the NFTs be? How will you set up the smart contract? What is the NFT marketing strategy? How will you generate hype around your NFTs and build a diverse community?

Here are two of the most common ways we see airdrops happening today. 

Method 1:

Just by sending someone an NFT, you could consider that “an NFT airdrop”. All you need is the public crypto wallet address of the receiving party and there are a number of ways to collect participants' crypto wallet addresses through a simple registration form. From there you could just send or airdrop the NFT to anyone who filled out the form. While this is the easiest way to do an NFT airdrop, this method obviously has some limitations. What if you want to scale your operation or apply some unique blockchain logic to your airdrop or NFTs?

Method 2:

  1. Set up a hardhat project, the industry-standard development environment for Ethereum smart contracts.
  2. Write the NFT smart contract with a built-in airdrop functionality.
  3. Deploy the smart contract from which NFT will be minted and airdropped to the public addresses of members captured through your registration form.

This method is a little more technical but is continuing to get easier. If you decide to pursue this option, here are some important things to keep in mind when designing your smart contract:

  • What will the maximum mint amount be?
  • Do you want to collect royalties or not from the resale of the NFTs?
  • Who will be responsible for minting the NFTs and paying the NFT and airdrop gas fee?
  • Do you want to include any built-in features such as rarity or utility, e.g. double as a ticket to exclusive events, unique experiences such as random gifts, etc.?

How To Promote an NFT Airdrop?

The NFT marketplace is awash with many projects. NFT launches are all about building excitement, therefore conducting proper promotion helps boost the visibility of your project. After all, the more excitement there is surrounding your NFTs, the more value people will ascribe to them. There are many tactics available to help deliver a successful NFT promotion, for example,

  1. Add the release to NFT Calendars: these are online platforms designed to help users create and share NFT-related updates or events to stay on top of the latest NFT drops
  2. List the project on Rarity.tools or Howrare.is: these are websites dedicated to ranking generative art and collectible NFTs by rarity. They show users the factors that contribute to their NFTs’ rarity score. Remember, the rarer an NFT is, the more value people ascribe to it
  3. Create educational content or videos: empowering your audience with educational content enables them to understand what your project is about and the value it delivers
  4. Affiliate or influencer marketing: this is a form of marketing that allows an affiliate or influencer to earn a commission by helping the NFT creator to sell their NFTs  
  5. Blockchain advertising networks: running ads on crypto networks, e.g. CoinMarketCap, Bitmedia, Coingecko, etc, can be beneficial because they are not only affordable but also target the right crowds.
  6. Organize a referral giveaway: this is a type of marketing campaign in which the audience can win NFTs through referring friends. It’s a great way to create hype for your NFT activities.

Many businesses in the web3 space have employed the referral tactic with great success. For example, users of Binance.com have been introduced to a new way of earning rewards by inviting their friends to join the platform. The double-sided reward works to give away $100 in trading fee credit when the referred friend registers for a Binance account and makes a deposit worth more than $50, to both the referrer and the referred friend.        

We’ll discuss in greater detail below how you can employ a viral referral strategy to promote your NFT airdrop.

An Example of a Viral NFT Airdrop

Using a referral program to promote your NFT airdrop works really well, R_Block used this strategy to raise $2,800,000, gain 60,000 email subscribers and build a Telegram community of more than 5,000 subscribers.

Let's take a look at how they did it.

1. R_Block promotes its airdrop across its social media channels and encourages community members to register for the airdrop and sign up for an incentivized referral program (using ReferralHero’s web3 referral program platform).

R_Block promoting its airdrop campaign on Twitter.

2. Member visits the airdrop registration + referral program landing page which has the ReferralHero Widget installed. The landing page details the participation requirements, i.e. first become a community member.

3. Member registers for the airdrop + referral program via the single signup widget on the landing page by entering their Telegram community username and connecting and verifying their wallet address. Collecting crypto wallet addresses is the main requirement for anyone wanting to participate in an NFT airdrop.

ReferralHero’s web3 referral program signup widget.

4. Members are immediately shown the sharing screen and prompted to share their unique referral link to earn more tokens.

ReferralHero's web3 referral program sharing screen.

5. Member shares their unique referral link to friends inviting them to join R_Block's airdrop and then the process is repeated.

R_Block smashed its ICO token sale target and raised over $2.8 million in the process using the above referral strategy. 

You can replicate similar results by using ReferralHero to launch your NFT airdrop or blockchain project. Sign up for ReferralHero’s powerful Web3 referral program platform today!

Sources: Cryptoslam , Binance , Coingecko

September 24, 2022

NFT airdrops are a new marketing sensation providing new ways for brands and businesses to engage with their community. NFT airdrops and the use cases around them are continuing to evolve but by the end of this article, you will have the foundation to capitalize on this new marketing trend. This guide will first cover some basics and then we’ll dive deeper to understand what all the excitement is about!

What Is a Non-Fungible Token (NFT)?

NFTs, branched off from the crypto culture, are unique cryptographic tokens that can represent ownership of anything imaginable such as an encrypted version of an asset in the real world, digital or non-digital collectibles, in-game items like avatars, unique artwork, domain names, fractionalized real estate, tickets that give you access to an event, even a unique sneaker in a limited-run fashion line.

The artwork, Everydays: The First 5000 Days, a collage of 5000 pictures made one per day over more than thirteen years, created by famed digital artist Mike “Beeple” Winkelmann sold for $69.3 million at Christie’s first-ever digital art auction in March of 2021. With investors and collectors’ flush of money that continues to pour money into this space, we’ve seen monthly sales of NFTs holding above US$600 million in recent months and reaching as high as US$4.5 billion in early 2022. The market for new NFTs will likely exceed US$20 billion by the end of 2022.

Everydays: The First 5000 Days

Originally just a fringe activity, NFTs have catapulted into the mainstream crypto culture as another money-making playground. Unlike crypto, which value comes purely from its economic utility as a means of payment or investment. NFTs, on the other hand, have a non-economic value that’s largely driven by perception. This blurs the characteristics of NFTs as part investment, part interest, that are based on personal and market demand rather than financial values.

Several factors are responsible for determining the value of NFTs:

  1. Rarity: demand for an NFT is directly proportionate to its perceived scarcity. The concept of scarcity is most commonly found in collectible or generative art & design which is often used to determine the value of a specific NFT within the collection. Great examples of rare NFTs are the first-of-its-kind artwork from various famous artists, for example, the CryptoKitties or CryptoPunks.
  2. Utility: this is the value or offer that’s attached to an NFT. Two categories of NFTs that have high utility value are tickets and game assets. For example, the Jabbawockeez White Glove NFT ticket collection offered by the tie-up between ticketing platform YellowHeart and MGM Grand Resorts, give holders access to perks such as premium seating, exclusive merchandise, food and drinks credits, and meet-and-greet opportunities.   
  3. Social proof: this indicates what people, in general, think about something. It is people’s interest and how much they are willing to pay for an NFT that drives the price of the asset. The more an NFT project garners demand from the community, i.e. the social proof associated with the project, the higher its floor price.

In NFT communities, the financial self-interest FOMO game is oftentimes amplified even more. Holders of an NFT collection may find it valuable to belong to a locked Discord community wherein savvy investors trade information or provide tips to one another. NFTs hence double as a membership card for holders to cross the “velvet rope” and enter the private club.

Six examples of the 10,000 randomly generated CryptoPunks.

What Is an NFT Airdrop?

If you dabble in NFTs, you’ve likely been airdropped an NFT at some point. Airdrops are an important part of the web3 space. They are generally used as a marketing or promotional incentivization tool to add additional value and utility to their holders or to draw attention to a brand or experience. They allow individuals and brands to foster new relationships, strengthen current ones, generate initial buzz, build a community of users and supporters and increase awareness and adoption of a particular project in a relatively easy and inexpensive way. Airdrops are in general a marketing stunt that involves an unsolicited sending of free coins, tokens, or NFTs to web3 wallet addresses.

An NFT airdrop can be initiated for several reasons. You may receive an NFT for joining a Discord group, signing up for a newsletter or sharing a social media post (standard airdrop), earning exclusive status for being a longtime loyal member of an NFT or web3-related community (exclusive airdrop), or simply holding a certain NFT in your wallet (holder only airdrop). Aside from being a nice gesture, airdrops are remarkably useful for branding. As the NFT collection circulation grows and the number of enthusiastic followers increases, it’s evident that the result of a strategically placed NFT airdrop is greater awareness. After all, the whole idea of an airdrop is to encourage people to embrace projects and boost participation.

An Example of a Successful NFT Airdrop

One of the most well-known examples of an NFT airdrop is the digital vials of mutant serum for Bored Ape Yacht Club, the bellwether for NFTs, holders, where holders of Bored Ape NFTs received an exclusive drop of Yuga Lab’s second project, Mutant Ape Yacht Club. These serums, which came in three distinct levels of scarcity -M1, M2, and M3 transform Apes into Mutant Apes, making the mutant Ape another NFT entirely and giving the holders the opportunity to sell this additional NFT. As of September 20, 2022, the floor price of a MAYC NFT is 14.4 ETH, with the cheapest ape costing nearly US$20,000.

Bored Ape characters used by the creators of the project.

The MAYC collection is built on the foundation of the infamous BAYC NFT collection. It was created to expand the BAYC ecosystem by onboarding new members into the community, giving more people the opportunity to earn tokens, and rewarding existing BAYC NFT holders with a second NFT that’s substantially different but based on Bored Ape traits and characteristics.   

While the BAYC NFT collection has a total of 10,000 NFTs, there are twice as many variants, the mutant apes. The existing BAYC holders were the first to receive the mutant serum airdrop - one serum per each Bored Ape owned. While the rest of the 10,000 mutant apes were released during the public sale. The best way to understand how an NFT airdrop works is to look at the launch and the MAYC mint process.

The inner workings of the MAYC NFT airdrop:

1. The BAYC team took snapshots of all BAYC NFTs prior to the airdrop. BAYC holders were then airdropped a total of 10,000 mutant serum NFTs.

2. BAYC holders had the following options for what they could do with the airdropped serum,

  • Holders could create mutants by combining their Bored Ape NFT with the serum NFT through a smart contract integration by paying the gas fee. This pairing mechanism generated a brand new mutant NFT and burned the serum token alongside. This process does not destroy the original BAYC NFT, and holders now have two distinct NFTs
  • Holders could sell the serum NFTs off for a profit

3. While anyone can purchase and sell serum NFTs, you need to own a Bored Ape NFT in order to apply the serum. Therefore, anyone looking for minting the mutant apes would have to invest a significant amount of money in purchasing the Bored Ape NFT and the serum NFT. The other option is to purchase the mutant ape NFT directly from the secondary marketplace without going through the minting process.

As of September 22, 2022, the cheapest Mutant Ape is priced at 14.94 ETH.

How To Use an NFT Airdrop For Your Business?

  1. Create brand awareness

An NFT airdrop represents another form of building brand awareness. It’s an innovative way of brand storytelling and audience interaction through the features and characteristics encoded into blockchain smart contracts that add extra value to the holders. With an NFT airdrop, businesses can achieve significant brand exposure and increase their chances of attracting new customers.

  1. Build communities

An NFT airdrop is a great alternative to traditional social media for businesses looking to connect with their community. NFT airdrops allow for an additional touch point and could give holders access to certain products or services not available to the general public.

  1. Generate revenue

Businesses can benefit from implementing an NFT airdrop that encourages or incentivizes purchases. The NFT could be given away as a freebie or they can be created to include resale royalties which give the creators a percentage of the sale price each time the NFT is resold. The average NFT royalty typically ranges from 5-10%. 

  1. Play-to-earn for ecosystem expansion

NFTs are highly integrated into the gaming industry. NFT airdrops could be used when gamers reach a certain level or earn in-game accessories. There are now marketplaces dedicated to gamers that allow them to buy and sell their earned NFTs. This results in an ecosystem that allows businesses to develop more digital assets such as game characters, virtual real estate, etc.

  1. Rewards for doing actions

An NFT airdrop can be used as a reward for doing certain actions, for example, referring friends or completing social actions. Gamification is often used as a tactic in referral programs with the top referrers getting airdropped substantially higher value NFTs than the rest of the participants.

How To Do an NFT Airdrop?

NFTs are going to become integrated into nearly all aspects of our lives. As the NFT space grows, businesses and creators are finding more creative ways to build NFTs and perform airdrops. While this article isn’t about creating NFTs, there can be some crossover between the creation and the airdrop itself. You’ll want to consider: What blockchain and marketplace will you use to mint and sell your NFTs? What will the format and content of the NFTs be? How will you set up the smart contract? What is the NFT marketing strategy? How will you generate hype around your NFTs and build a diverse community?

Here are two of the most common ways we see airdrops happening today. 

Method 1:

Just by sending someone an NFT, you could consider that “an NFT airdrop”. All you need is the public crypto wallet address of the receiving party and there are a number of ways to collect participants' crypto wallet addresses through a simple registration form. From there you could just send or airdrop the NFT to anyone who filled out the form. While this is the easiest way to do an NFT airdrop, this method obviously has some limitations. What if you want to scale your operation or apply some unique blockchain logic to your airdrop or NFTs?

Method 2:

  1. Set up a hardhat project, the industry-standard development environment for Ethereum smart contracts.
  2. Write the NFT smart contract with a built-in airdrop functionality.
  3. Deploy the smart contract from which NFT will be minted and airdropped to the public addresses of members captured through your registration form.

This method is a little more technical but is continuing to get easier. If you decide to pursue this option, here are some important things to keep in mind when designing your smart contract:

  • What will the maximum mint amount be?
  • Do you want to collect royalties or not from the resale of the NFTs?
  • Who will be responsible for minting the NFTs and paying the NFT and airdrop gas fee?
  • Do you want to include any built-in features such as rarity or utility, e.g. double as a ticket to exclusive events, unique experiences such as random gifts, etc.?

How To Promote an NFT Airdrop?

The NFT marketplace is awash with many projects. NFT launches are all about building excitement, therefore conducting proper promotion helps boost the visibility of your project. After all, the more excitement there is surrounding your NFTs, the more value people will ascribe to them. There are many tactics available to help deliver a successful NFT promotion, for example,

  1. Add the release to NFT Calendars: these are online platforms designed to help users create and share NFT-related updates or events to stay on top of the latest NFT drops
  2. List the project on Rarity.tools or Howrare.is: these are websites dedicated to ranking generative art and collectible NFTs by rarity. They show users the factors that contribute to their NFTs’ rarity score. Remember, the rarer an NFT is, the more value people ascribe to it
  3. Create educational content or videos: empowering your audience with educational content enables them to understand what your project is about and the value it delivers
  4. Affiliate or influencer marketing: this is a form of marketing that allows an affiliate or influencer to earn a commission by helping the NFT creator to sell their NFTs  
  5. Blockchain advertising networks: running ads on crypto networks, e.g. CoinMarketCap, Bitmedia, Coingecko, etc, can be beneficial because they are not only affordable but also target the right crowds.
  6. Organize a referral giveaway: this is a type of marketing campaign in which the audience can win NFTs through referring friends. It’s a great way to create hype for your NFT activities.

Many businesses in the web3 space have employed the referral tactic with great success. For example, users of Binance.com have been introduced to a new way of earning rewards by inviting their friends to join the platform. The double-sided reward works to give away $100 in trading fee credit when the referred friend registers for a Binance account and makes a deposit worth more than $50, to both the referrer and the referred friend.        

We’ll discuss in greater detail below how you can employ a viral referral strategy to promote your NFT airdrop.

An Example of a Viral NFT Airdrop

Using a referral program to promote your NFT airdrop works really well, R_Block used this strategy to raise $2,800,000, gain 60,000 email subscribers and build a Telegram community of more than 5,000 subscribers.

Let's take a look at how they did it.

1. R_Block promotes its airdrop across its social media channels and encourages community members to register for the airdrop and sign up for an incentivized referral program (using ReferralHero’s web3 referral program platform).

R_Block promoting its airdrop campaign on Twitter.

2. Member visits the airdrop registration + referral program landing page which has the ReferralHero Widget installed. The landing page details the participation requirements, i.e. first become a community member.

3. Member registers for the airdrop + referral program via the single signup widget on the landing page by entering their Telegram community username and connecting and verifying their wallet address. Collecting crypto wallet addresses is the main requirement for anyone wanting to participate in an NFT airdrop.

ReferralHero’s web3 referral program signup widget.

4. Members are immediately shown the sharing screen and prompted to share their unique referral link to earn more tokens.

ReferralHero's web3 referral program sharing screen.

5. Member shares their unique referral link to friends inviting them to join R_Block's airdrop and then the process is repeated.

R_Block smashed its ICO token sale target and raised over $2.8 million in the process using the above referral strategy. 

You can replicate similar results by using ReferralHero to launch your NFT airdrop or blockchain project. Sign up for ReferralHero’s powerful Web3 referral program platform today!

Sources: Cryptoslam , Binance , Coingecko

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