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The cryptocurrency sphere offers many ways to earn money, and one of the relatively recent but already gaining popularity is retrodrops. Essentially, these are rewards that projects award to users for participating in the early stages of their development, even if the planned bonuses were not announced at the time of their interaction with the platform.
In this article, let's understand what retrodrop is, how it differs from airdrop, how it can be earned and what risks exist.
Retrodrop: what it is
Retrodrop is a method of rewarding users who interacted with the project before the official release of the mainnet or token listing. Unlike the classic airdrop, in most cases retrodrop is not focused on attracting new users, but on rewarding existing users. Usually, such rewards are given to users who have tested the platform, used its products, left reviews or made transactions. For example, a project may award tokens to all users who performed any actions on their platform before a certain date. Retros are especially popular among blockchain projects at the initial stage, when they do not yet have their own token. In this way, they can attract attention to the product and gain a loyal audience that will potentially form the basis of their future community
The difference between a retrodrop and an airdrop
At first glance, retrodrops and airdrop may seem similar, but there are a few key differences between them:
Purpose: Airdrop aims to attract new users and increase the project's audience, while retrodrop aims to encourage those who are already engaged in the project.
Timing: Airdrops are announced in advance and are held for the purpose of advertising. Retrodrop events can happen unexpectedly, and information about them is received only after the necessary conditions are met.
Requirements: Airdrop participants usually perform simple tasks, such as subscribing to the project's social networks and other community activities. To participate in a retrodrop, you need to already be a user of the platform and perform a number of actions up to a certain point.
So, if airdrops are a marketing campaign aimed at attracting attention, retrodrops, on the contrary, are a hidden bonus for those who have supported the project from the very beginning.
Examples of retroadropes
Retrodrops are actively carried out on blockchain platforms, as well as in projects related to decentralized finance (DeFi) and NFT. Here are a few notable examples:
- Uniswap: One of the most famous retrodrops. In 2020, Uniswap, a decentralized exchange, gave away their UNI tokens to all users who transacted on their platform at least once. Users received 400 UNI tokens each, which was worth about $1,200 at the time.
- 1inch: Liquidity aggregation platform 1inch retrodropped in December 2020, awarding tokens to its early adopters, which also generated substantial profits for those who took advantage of the opportunity in time.
- Paraswap: In 2021, this project also credited tokens to early users who were actively using the platform.
Each of these retrodrops has had a significant impact on the crypto community and brought attention to the platforms, proving that engaging with new projects can be not only rewarding but also profitable.
Why retrodrops are conducted
Retrodrosprops have several key purposes:
Encourage loyal users
Retroadroads allow projects to reward early users for participating, thereby strengthening their connection to the platform.
Building a user base
Early users who have received tokens can form the basis for an active community and contribute to the continued growth of the project.
Decentralization
Retrodrops can be a tool to distribute tokens evenly among the network participants, making it more decentralized.
Marketing and increased visibility
Although retrodrops are not initially aimed at attracting new users, they create a high level of interest in the crypto community. Thus, retrodrops are a powerful tool for attracting loyal users and increasing trust in the platform.
How to find retrodrops
Since retrodrops are usually not announced in advance, it's important to be able to recognize potential opportunities:
Monitoring new projects
Often, new blockchain projects that don't yet have tokens can later hand out retroadrops. It is important to keep an eye on popular crypto analytics platforms such as CoinGecko, CoinMarketCap or DeFi Pulse.
Studying trends
Many projects on DeFi, GameFi and NFT have a high probability of triggering a retrodrop. Subscribing to their social networks and participating in test networks can bring future bonuses.
Using specialized platforms
Platforms like DeBank and Dune Analytics provide analytics on new projects and their activity. This helps in spotting promising projects in time.
Early involvement in new projects is one of the most effective ways to get retrodrop.
How to participate in a retrodrop
To get a retrodrop, you need to follow some guidelines:
1. Choose potentially interesting projects
Usually, new or emerging platforms that have not yet released their token are suitable for retrodrop.
2. Interact with the platform
This may include registering, testing functionality, performing transactions on the test network, writing feedback and suggestions for improvement.
3. Keep a history of your interactions
To make it easy for the platform to identify you as an early user, save data about your actions (e.g. transaction IDs).
These actions don't guarantee 100% of getting a retrodrop, but they do increase the chances of getting one, as many platforms take into account user activity during the initial launch phase.
What kind of earnings you can count on
The size of the retrodrop depends on the popularity of the project, the time spent by the user on the platform, the volume of interactions and the funds allocated for encouragement. On average, retros can bring from a few hundred to a couple thousand dollars. For example, Uniswap users have received up to 400 UNI, which at current market prices is equivalent to several thousand dollars. Nevertheless, not all retrodrops bring such high returns, and it is difficult to estimate the earning potential in advance. It is worth remembering that the final benefit depends on the liquidity of tokens and their market value.
Criteria for selecting a retrodrop
When selecting projects to participate in a retrodrop, it is important to consider the following factors:
1. Reputation and reliability
Projects with a good team, attracted investments, high level of security are less risky for the user.
2. Scopes
DeFi, NFT and GameFi projects are more likely to retrodrop than others, so you should favor these sectors.
3. Team activity
If a project is actively developing and has plans to launch tokens that are spelled out in the official roadmap, this is a good sign for a possible retrodrop.
A proper assessment of the project's prospects helps to avoid disappointments, loss of funds and to choose the best opportunities for retrodrop.
The most successful retrodropes
Some retrodropes have been particularly successful and profitable:
- Uniswap (UNI): One of the most famous retrodrop, bringing users thousands of dollars.
- dYdX: The platform gave out tokens to its new and active users, which encouraged future projects to stick to a similar system.
- 1inch: The platform conducted a successful retrodrop, which also brought attention to the product.
- Arbitrum (ARB): Users who fell under the loyal retrodrop criteria received several hundred dollars per account at little cost.
These retrodrops showed how early participation and interest in new projects can bring high returns, making them popular among crypto-enthusiasts.
What are the risks
Despite the benefits, there are risks associated with retrodrops:
1. Low value of tokens
Some tokens obtained in retrodrops may be of low value, especially if the project does not attract proper attention or fails to meet expectations.
2. Fraud
In the crypto industry, there is a possibility of encountering fake retrodrops. Some scammers may offer “giveaways” to get hold of users' funds.
3. High volatility
The exchange rate of tokens received can fluctuate a lot, and earnings can change depending on the state of the market.
4. activity requirements
Participating in retrodrops often requires a significant amount of effort and time, and in some cases an investment of funds to utilize the platform, which can be a barrier for some users.
Frequently Asked Questions (FAQ)
1. How do retrodrops help build community?
Retrodrops reward users who have supported a project early on. This creates a loyal base interested in its development, which fosters an active community.
2. What do I need to do to get a retrodrop?
Usually you need to use the platform during its testing phase or directly on mainnet: make transactions, leave feedback and participate in product tests.
3. Why are retrodrops attractive to power users?
Retrodrop rewards informed participation, not simple tasks like in airdrops. This suits users who are more deeply involved in the project and are willing to invest resources and time.
4. What are the main risks in practicing retrodrop?
The risks may be the following - the received tokens will have a low value, there is a risk of encountering fraudsters, the need for significant efforts to fulfill the conditions of retrodrop.
5. How do I know that the project is preparing a retrodrop?
The probability of retrodrop is higher for DeFi, GameFi and NFT projects. It is worth paying attention to roadmaps, developer activity and announcements.
