Airdrop (crypto).
In plain English
An airdrop distributes tokens to a set of wallet addresses without those holders paying for them, usually to build an initial user base or to reward people who used a protocol before it had a token. Legitimate airdrops are announced by the project and claimed on its own site, and they never require a seed phrase. Fraudulent ones send unsolicited tokens into a wallet so that a holder who tries to sell them is led to a site that requests wallet approvals, which then drain real assets. If unexpected tokens appear in your wallet, the safe move is to leave them alone rather than interact with them. Airdropped tokens received have tax consequences described by the IRS.
01Why it matters
An unexpected token in your wallet is not a windfall, it is usually bait, and the loss comes from the approval you grant while trying to cash it in.
02The math, step by step
Say a wallet receives 5,000 unknown tokens showing a quoted value of $2,500. Selling requires connecting to a site and approving a contract. That approval can authorize the contract to move other tokens, so a $2,500 illusion becomes a real loss of whatever else the wallet held.
Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.
03What this is NOT
A dividend is a company paying out profits it earned to its owners. An airdrop creates new tokens and gives them away, most often as marketing. No earnings back it, and receiving one confers no ongoing claim on anything.
04Receipts
Every figure on this page is sourced to a primary document. Tap to open the original.
Plain-English answers from our glossary. Receipts included. Never advice.
Educational tool. Answers come only from ClearMoneySchool's published glossary and are not advice. Why we never give advice