Let’s ask a series of questions and try to answers them one by one, with the aim being mastery in profiting from Airdrops

Airdrop is when a crypto company/project/dApp gives users of their product based on certain criteria, for example users of Arbitrum L2 were Airdropped with $ARB tokens worth $500 to $10,000. However not all arbitrum users got the airdrop, only wallets which passed a certain criteria got it. Will discuss most common criterias later.

Well there are several reasons for doing an Airdrop listing the most prominent ones :-

1. Decentralization – Many crypto platform want to decentralize their product and make it community governed to stay true to the crypto ethos and also create value out of thin air, best and the most popular way to do it is creating a DAO (Decentralized Autonomous Organization) and using tokens as voting power which are airdropped to users who are using the product.

2. Free Marketing & Adoption – In the past very few people were aware of airdrop hunting, i.e using various defi products and crypto platforms only for the sake of getting a Airdrop, but now a days with more crypto adoption in developing countries where one good airdrop can be worth a year’s salary, hunded thousands are actively hunting for airdrops and many crypto companies are aware of this. They use the promise of a future airdrop and lure many hunters boosting their customer base

3. Free Testing – This is especially true for startups or crypto projects with small teams, they might not have a lot of testing engineers or debuggers like other web2 companies, in web3 they can just launch a “Incentivized Testnet” , testnet means the protocol/blockchain is functioning but we are not using real money while using it we generally use Goreli ETH/Sepolia ETH/Testnet tokens which is like monopoly money given to us to test the platform. Incentivised testnet means testers will be given rewards in the future.

4. Pressure from VCs - Crypto currencies that are highly funded by VCs always have a pressure to launch a token asap and return profit to early investors

Just join our FREE Onchain Alpha Telegram grp and you will be notified of all the good Airdrop Opportunities https://t.me/+CB83wZ_kKL4xMjdl

It’s a discussion group hence you can chat and ask doubts if you want to…

also follow me on twitter i share the airdrops i do on there -

https://twitter.com/onchaingambit

Also follow me “Onchain Alpha” on Twitter Now let’s get to most important part

How to Profit from Airdrops? Well we firstly need to categorize Airdrops based on how much they cost to perform it’s steps

1. FREE – Basically all the tasks we need to perform to get the Airdrop are free, but there are so many fake or low quality lucky draws in name of “free” airdrops we need to be selective

2. Gas Fee – We need to spend some money to perform the tasks which we will never get back

3. Gas Fee + Capital – We need to spend gas fee but we also need to lock up out capital

4. Gas Fee + Stake – Basically meaning we do not lock a fixed capital but we let’s say buy a NFT required for the Airdrop which can change in value.

As for the Free Airdrops we can do all the quality ones and we definitely need to keep track of each and every Airdrop as we might forget what we did..

For the last 3 we need to examine the risk to reward and see if the odds are in our favour or not, let’s try to make an Algorithm for it…

For any Airdrop investment we need to think of them as VCs do, out of 10 Airdrops you do 1 will give such high returns it will cover all 10 investments and also give profit

Hence PossibleGain / cost > 10

Now to calculate possible gain

let’s call the possible gain ‘A’ which means Airdrop Amount

F = Funding

P = Participants

k = constant (determines how profitable the airdrop was)

A = (F*k)/p

let’s calculate k = (A*p)/k

Let’s take 5 eaxmples to get the value of k

A = $4500 (3x multiple acc coz free)

p = 125k

F = 350M

k = 1500

A = $3000

p = 650k

F = 357M

k = 5400

A = $400

p = 271k

F = 10M

k = 10,840 (meaning it was a great airdrop considering funding and participants)

A = $1000

p = 60k

F = 12M

k = 5000

A = $2000

P = 250k

F = 178M

k = 3000

Conclusion :

on low end k =1500

Average : k = 5000

High end : k = 10,000

If we consider % of circulating supply as C and Kc as new constant if

A = (F*C*Kc)/P

Average Kc = 600

Higher side: Kc = 3000

Let’s predicts $TIA airdrop per wallet

Kc = 600

F = 56M

C = 6%

P = 200k

A = $1000 per wallet

Hope you liked my Article follow me on twitter to show support and Mint this Article too if you have funds : )