Blockchain Market

Market

What Is the Crypto Market?

The crypto market is divided into two large markets: the primary market and the secondary market. In simple terms, before a coin is listed, it is called the primary market. After the primary-market process is complete and the coin is listed on an exchange, it is called the secondary market. It can also be understood as the public market after issuance, where everyone can trade and buy or sell on exchanges.

What Is the Primary Market?

The primary market, also called the initial market, is the market where newly issued coins are sold by issuers to investors. Simply put, the primary market is the stage before each coin is listed on an exchange, when the issuer conducts public or private fundraising with investors. This is what people in the crypto community often call primary-project private-sale coins. Trading that does not go through an exchange is called the primary market, and it can also be called the gray market. Trading on an exchange is called the secondary market. Both are supply-and-demand relationships: when one side has excess demand, the other side will follow.

What Are the Benefits of the Primary Market?

Before each coin is listed on an exchange, it is called the primary market. When a coin is preparing to list on an exchange, it goes through several stages. Seed round: an early round mainly funded by individuals or institutions to provide initial capital for building the team. Private round: mainly for institutions, with reserved investment allocations, larger institutional investment amounts, and discounted prices. Public round: mainly for individuals, where ordinary users invest smaller amounts. In the primary market, seed prices are generally relatively low, but many coin holders cannot find channels to participate in primary-market projects. Compared with the secondary market, participating in the primary market offers greater opportunities, and the prices obtained are much lower than secondary-market prices. Some friends may already see the value multiply many times, even dozens or hundreds of times, the moment the coin lists on an exchange. This can be described as winning right at the starting line. Perhaps this is the charm of the primary market. Because retail investors or individuals cannot find channels, this is also the problem with the primary market that many people do not know about.

Airdrops

What Is an Airdrop?

Airdrop literally means a "drop" from the sky. In practice, it is a reward given by a project team to users for one or more purposes, most often marketing. The typical behavior is to send tokens directly to suitable user accounts, or allow eligible users to claim tokens themselves. The earliest airdrops can be traced back to Bitcoin's early days, when users could receive airdrops simply by sharing or introducing Bitcoin on social media. Today, although a small number of project teams still reward participants in similar ways, more project teams set more conditions to screen users. The current mainstream approach is for users to prove their potential value through staking, interaction, and other behaviors, and then receive the project team's airdrop.

Why Do Airdrops Exist?

Airdrops may sound like free gains for users, while the project team does not seem to pay much actual cost, making it an obvious value giveaway. The logic behind it is not difficult to understand: distributing tokens for free promotes the project, while public word of mouth and later token usage release very positive signals. For an ecosystem or project, this is a long-term positive method.

Take this year's highly popular L2 public chain Arbitrum as an example. The project team airdropped 1.162 billion ARB to community users, and about 625,000 wallet addresses received the airdrop. The average amount of ARB airdropped per address was 1,859. The wealth effect brought by the ARB airdrop not only excited community users, but also helped ecosystem development from the side. In fact, after the airdrop ended, the ecosystem's user count and activity did not cool down just because the airdrop incentive had temporarily concluded. Dune data shows that Arbitrum's daily active users and transaction volume are still reaching new highs.