In today’s Exponential Investor:

  • A peek behind the curtain
  • Free money?
  • It’s not too good to be true any more

Occasionally you might come across some of the advisory services we publish at Southbank Investment Research. Indeed, you might even already receive them.

We cover everything from defensive stocks and ways to protect your wealth in times of uncertainty to optimistic revolutionary trends, breakthrough technologies and ways to profit from the new world of climate tech.  

The views of a controversial editor of a controversial publication

One of the most controversial publications we offer is Crypto Profits Extreme.

I say controversial because I still have plenty of people think I’m a scammer just for being the editor – i.e. the principal writer – of that service. There are still a lot of people who think that crypto is a scam and a Ponzi scheme and that it’s all going to come crashing down.

They’re wrong. But that’s OK: I’m not here to change the minds of those who aren’t open to change.

What I do want to do, though, is give you a sneak peek at the kind of things that we cover when we look at the world of crypto.

It’s easy to just think of it all as bitcoin or maybe Ethereum. But the reality is that that barely scratches the surface any more. There’s a burgeoning financial system under construction which could open up wealth-building opportunities the likes you’ve never seen before in your life.

And last week to prove just how exciting an opportunity the world of crypto can be for open-minded people, I released the most important investor briefing of my career to show you how to generate potentially mega yields – and in an easy step-by-step way that anyone can follow. As with any investment, it comes with risk but if you’ve not seen the briefing yet, then open your mind, get ready to learn and go check it out.

The detail of the emerging crypto economy is so important, that if you don’t know what you’re doing, or what to look for, you can miss the big opportunities. You have to stay on the ball 100% of the time or you can miss big chances you didn’t even expect to land on your lap.

That’s why I’m going to let you see one aspect of the crypto world today that you must know about. If you’re in crypto and don’t know about the “airdrop”, you could literally be missing out on piles of free money and not even know it…

Is 2022 the year of the airdrop?

It pays to be active in the crypto world. It’s also important you to test, try, experiment with different blockchains, platforms, applications and, indeed, everything you can.

You of course need to measure this testing and trying with the highest risk mindset: a lot of times while in the process you will make errors or mistakes that could cost money.

But if you’re open minded to the potential of different aspects of the crypto ecosystem, this test-and-try approach can end up being quite lucrative.

First, we need to cast our minds back to when a relatively unknown crypto decentralised exchange called Uniswap began operations.

In its early days, Uniswap was a great place to try and experiment with decentralised exchanges and autonomous market makers (AMMs).

When Uniswap first launched there was no Uniswap token. It was just something you connected to on the Ethereum blockchain if you wanted to trade and exchange or participate in the market making.

And that was true until September 2020…

Uniswap, out of nowhere, decided to airdrop UNI tokens on to people who’d been active participants on Uniswap. We covered this here in Exponential Investor when it happened – you can revisit that here.

In short, if you’d interacted with its smart contracts in any way prior to the release of the airdrop, you’d have landed yourself some UNI tokens.

At first UNI tokens had a circulating value of just a couple of dollars. They then pumped higher and dumped lower to under $2.

At this stage I’m sure a lot of Uniswap airdrop recipients would have sold out.

However, within six months of the airdrop, the price of UNI tokens had skyrocketed to over $36!

Remember that all that you had to do to benefit from the airdrop was merely to interact with Uniswap – 400 tokens (which was a pretty common airdrop amount) would have been worth $14,400 at the peak. That is a lot of literally free money.

Of course, there was no way that you could have known in advance that Uniswap was going to airdrop UNI to participants.

But this kind of thing is becoming very common in the crypto world now.

Projects and crypto applications are starting to airdrop tokens to participants in their ecosystem. Much of it is to get around the sale of securities in the eyes of the regulators (I assume) but the idea of rewarding a community is also a strong added benefit.

Nothing new, but certainly lucrative

As you will have gathered by now, an airdrop is a token distribution to crypto wallets that is free.

This process of airdropping tokens isn’t anything new. It’s been going on for many years. Early on the premise behind airdrops was to raise awareness for a project. These were a marketing exercise more than anything to do with a community.

For example, you’d see something like “Avocado tokens” in your ETH wallet.

This prompts you to ask yourself, what the hell is this “AVO” token?

You’d then Google it or search on Twitter for it which would lead you to a website or social media handle and the idea is you’re suckered in to buy more of the token.

Sometimes the airdrop token wasn’t a real token. It was just like junk mail and couldn’t actually be sold. So you might think you have a massive airdrop worth thousands or tens of thousands, but in reality it would have been worth $0.

More recently, though, airdrops (like Uniswap) have become valuable.

Whether that’s just interacting with an application or buying and selling non-fungible tokens (NFTs) or playing a game… whatever it might be, these airdrops are coming thick and fast.

The best airdrops, however, seem to be ones that appear out of the blue. These are situations where the airdrop recipients are completely unaware an airdrop is even coming.

Uniswap is perhaps the most significant airdrop that we’ve seen in recent times.

Another is the Ethereum Name Service (ENS) airdrop. Again, it came out of the blue from nowhere. Instantly dropping $500+ million worth of tokens on unsuspecting wallets.

In the early stages of the airdrop, tokens began trading around $30. They then pumped to highs of over $80 within a month. Having fallen back to under $15, the question is, do they follow a similar pattern to what we saw with Uniswap or do they linger lower until the whole market heads higher again?

Another recent big-name airdrop was OpenDAO (SOS). This was an airdrop to people who’d transacted value on the giant NFT marketplace, Opensea.

Another was the LooksRare (LOOKS) airdrop. Another that’s just hitting the headlines last week has been the ApeCoin (APE) airdrop for Bored Ape Yacht Club (BAYC) NFT holders.

These are just a few of the many examples of airdrops of big value we’ve seen recently. But if you’re not switched on or aware, you can miss out. Many of these have limited time windows to claim the airdrops, and if you don’t claim, you miss out.

The crypto world moves fast. Free money sounds too good to be true…

Many times it is…

But I thought the same thing when I first came across bitcoin over a decade ago. I don’t think like that any more. Not when it comes to crypto. Neither, in my view, should you think like that.

Until next time…

Sam Volkering
Editor, Exponential Investor