In the cryptocurrency and blockchain ecosystem, the term โAirdropโ refers to the distribution of digital assets to the public, either by virtue of holding a certain other token or simply by virtue of being an active wallet address on a particular blockchain.
This is separate and distinct from the allocation of tokens or coins that happen via an ICO event. During ICOs, the digital asset being offered is typically purchased using an alternate coin or token. In the case of airdrops, there is no purchase required from the recipient, meaning that the assets are distributed for free.
Airdrops are often used as a marketing tool in order to raise awareness of the coin or token that is being distributed, as well as a method of diversifying the number of holders of that asset.
Airdrops, along with forks, have been considered by some as a kind of dividend payment earned by holding a digital asset, insofar as it is an additional premium paid out to token holders on a pro-rata basis.