Coinbase announced an airdrop of one billion Stellar Lumens ($100 million) this week in a bid to boost crypto education and keep its users happy. Coinbase users who watch educational videos about Stellar—a cryptocurrency designed for cross-border payments—and share them to their friends will earn up to $50 of tokens.
This comes hot on the heels of Blockchain.com’s giveaway of $125 million worth of Stellar late last year. This was to encourage its users to go through know-your-customer profiles, enabling it to get a better picture of who its customers are.
But these are just the tip of the iceberg. The Stellar Development Foundation has a further 77 billion Lumens ($7.7 billion) to give away. Will this flood of new coins sink the market—or fuel a larger Stellar community?
Stellar Lumens (XLM) is the native asset of the Stellar network, which was founded in 2014 by Jed McCaleb—the founder of Mt. Gox and the co-founder of Ripple. The goal of Stellar is to improve the efficiency of payment systems and financial infrastructures.
The Coinbase airdrop—which is part of Coinbase’s Earn initiative that incentivizes users to complete simple courses about crypto and blockchain technology—is the exchange’s largest offer ever, and will result in the distribution of up to one billion Stellar Lumen, courtesy of the Stellar Development Foundation, to any US-based users that receive an email notification notifying them of their eligibility to complete the course.
Although all the Stellar-funded airdrops are engaging marketing moves, XLM investors are likely keen on figuring out how they could impact Stellar Lumens’ price.
Because these airdrops will result in a deluge of XLM into the public markets that was previously held by the Stellar Development Foundation, it could put downward pressure on the cryptocurrency’s price at a time where the entire crypto market is resting on the edge of a precipice. Even Bitcoin has been continuing to face resistance in the low-$4,000 region.
Yet, one benefit of airdrops like these is that they will direct a significant amount of publicity towards Stellar (see, for instance, the story you’re reading now) and might bring more people into the community. And that, of course, could result in the creation of more Stellar-based applications, which would further aid adoption rates.
Airdrops are fun—and might affect the short-term price of crypto. But long term, real-world use cases that utilize the Stellar protocol, such as IBM’s World Wire payment system, will be what determine the success of XLM.
This post was originally published on Decrypt. Bitnewsbot curates, examines, and summarizes news from external services while producing its own original material. Copyrights from external sources will be credited as they pertain to their corresponding owners.