# Airdrop

*Crypto & Digital Assets — Finicade finance glossary*

An airdrop distributes free tokens to users who have interacted with a protocol, used to reward early adopters and decentralise ownership. It has become a mechanism in itself: users farm expected airdrops by transacting speculatively across new protocols. Airdrops are taxable as income in many jurisdictions at receipt, which regularly surprises recipients whose tokens then fall in value.

**Also known as:** token airdrop, retroactive airdrop, airdrop farming

**Related terms:** [Tokenomics](https://finicade.com/glossary/tokenomics), [Circulating Supply](https://finicade.com/glossary/circulating-supply), [DAO](https://finicade.com/glossary/dao), [Web3](https://finicade.com/glossary/web3), [Rug Pull](https://finicade.com/glossary/rug-pull)

Source: https://finicade.com/glossary/airdrop