The Concept of Initial Airdrop Offering (IAO)
Since the launch of cryptocurrency in the market, a myriad of terminologies has been put forth by the industry – ICO, IEO, STO, IAO, etc. For the crypto experts and analysts, these terms are quite familiar; however, for the novices; these acronyms could be very confusing in nature. This article helps you to understand the concept behind one of these abbreviations – IAO. IAO stands for Initial Airdrop Offering, and as the name suggests, it refers to the free tokens. Yes! You read it right; Airdrop means you are getting tokens absolutely free of cost. Now you might feel that it is unorthodox on the part of an organization to provide free tokens to the customers or person interested in the offer, but there is a solid reason behind this practice.
Why Companies are offering Tokens Free?
In order to understand the rationale behind IAO, you should be aware of the concept of initial coin offering (ICO). The ICO works along the same lines of IPO, and it is a process through which a company intends to launch a cryptocurrency in the market. The year 2017 had been a terrific year for the ICOs through the downtrend crypto in 2018 took a heavy toll on the ICOs. Most of the investors lost interest in ICOs, and it is now increasingly becoming difficult for organizations to attract attentions through ICOs. In fact, many customers feel exasperation when they hear the launch of yet another cryptocurrency in the market. In order to break this clutter, the concept of IAO comes into being wherein companies have started providing free tokens to potential investors in order to seek their interest and attention. It is even more important from a marketing viewpoint, and this practice helps to create a good brand image of the company – after all, you are going to feel good about the organization which has given you something free of cost. This positive first impression is something that companies intend to achieve through the IAO. For example, if the company XYZ is coming up with a cryptocurrency project and you receive some of the coins of that digital currency right in your wallet free of cost, the probability is high that you might look into the project. This arousal of the interest might also induce you to invest in the project, which is ultimately the aim of the XYZ Company behind providing these free tokens to you.
Benefits of IAO
IAO is a kind of win-win situation for both the company and investors. It costs absolutely nothing to the company to provide these tokens while as a customer, you will also gain in terms of getting free tokens in your wallet. The practice of Airdrops also helps to decentralize the distribution of tokens and make sure that the allocation follows a uniform pattern. We can cite the example of Omise Go which went ahead with Airdropping a large number of its tokens to holders of Ethereum. The rationale given by Omise Go behind this was to distribute the tokens across a wide variety of stakeholders. This will help the currency to have a decentralized structure rather than concentrating allocation among a handful of holders.
Information about IAO
Getting the information about the IAO is not a difficult task. Many organizations put out the details in their press release while others might take other routes to reward you with Airdrops. For example, if you become a follower of a particular crypto organization on their social networking platform, the company might reward you with “free tokens” though terms and conditions of getting these freebies differ from company to company. Also, you need to be careful about some of the fictitious IAO offers where organizations ask you to pay some specific amount or share your private wallet key so that you benefit from their Airdrops. Never respond to these kinds of messages and emails as any genuine organization will never ask you to submit the fee or confidential details. Therefore, you need to be careful while availing the benefits of IAO.