Three years late airdrop: Profit or Loss? Coinbase returns OMG airdropped tokens to users

According to an email received by a user, the exchange Coinbase is airdropping OMG tokens to users who held Ethereum in 2017. Additionally, the mainstream U.S. exchange continues to expand its influence by announcing the acquisition of the cryptocurrency trading firm Tagomi and further expanding its staking services to users in the UK, France, Spain, and the Netherlands.

What is Airdrop?

An Airdrop is a unique culture and method in the cryptocurrency community, where people can "give away" cryptocurrency issued on the same blockchain to those who have a wallet address on that blockchain through smart contracts. It is seen as a marketing strategy to increase usage, visibility, or as a reward.

Formally known as "Initial Airdrop Offering (IAO)," an Airdrop is a token distribution conducted by cryptocurrency developers based on custom rules, typically allowing holders of public chain wallets (such as Ethereum, EOS, etc.) to receive tokens for free by completing specific simple conditions. The main motivation is to expand project visibility, increase community engagement, participants, and even attract investors.

The Delayed OMG Token Airdrop

Going back to July 2017, OmiseGo (OMG), with Ethereum founder Vitalik Buterin endorsing it, distributed OMG tokens to Ethereum holders through an Airdrop, but at that time, Coinbase did not support OMG. Today, Jordan Spence, the Chief Marketing Officer of mycrypto.com, shared a letter from Coinbase on Twitter:

On July 7, 2017, OmiseGo airdropped tokens to Ethereum holders. Since Coinbase did not support OMG at that time, we did not distribute the Airdrop. Coinbase started supporting OMG on May 21, 2020. As you held Ethereum on Coinbase during the Airdrop, you will receive OMG. No action is required. The eligible tokens have been credited.

This recent distribution by Coinbase also demonstrates the immutability of the blockchain ledger. The Ethereum wallet owned by Coinbase did indeed receive these Airdrop rewards that should have belonged to users back then, and now, based on this record, they are returned to users after Coinbase added support for OMG.

During the Airdrop at that time, anyone holding Ethereum could receive 0.075 OMG for free. Looking at the price data from July 14, 2017, one OMG was worth $0.5, and it reached a historical high of $26 in early 2018, before settling at $1.6 at the time of writing. While it was unexpected windfall, for Ethereum whales, missing the opportunity to sell at the high price back then could mean significant losses.

Tezos Staking Service Expands to Europe

Coinbase pointed out that global finance continues to be impacted, with the European Central Bank implementing negative interest rates, and Bank of England Governor Andrew Bailey not ruling out the possibility of lowering rates below zero for the first time in history. Therefore, they announced the provision of Tezos (XTZ) staking services for users in the UK, France, Spain, and the Netherlands.

According to the official announcement, based on Coinbase's returns over the past three months, the estimated annual yield is about 5%. After the initial lock-up period (35 - 40 days), rewards are automatically distributed every three days, and users can choose to opt-out at any time.

Interestingly, Coinbase's Tezos (XTZ) token staking comes with a hefty 25% fee, yet it remains the largest institution for Tezos token staking.

In comparison, Binance offers a staking rate of 6.12%, just below OKEx Pool, with no fees, but still ranks third in the chart above.

According to stakingrewards platform data, Tezos (XTZ) currently has the largest staking market value, leading at $1.91 billion ahead of EOS's $1.58 billion.

On the 27th of this month, Coinbase announced the acquisition of institutional crypto brokerage Tagomi. This platform, which has only been launched for 18 months, has provided services to many well-known institutions such as Paradigm, Pantera, Bitwise, Multicoin, and others.

Coinbase believes that Tagomi's addition will enable them to better adapt to the rapidly growing institutional trading market.