Crypto faucets were invented by Gavin Andresen in 2010. They were designed to be a “reward” system and a promotion tool, giving out Bitcoins for free to help raise awareness and adoption of the new and then relatively unknown cryptocurrency. Faucets were a tool to promote Bitcoin, you might, for example, be given free Bitcoin in exchange for going to a website or watching a video on a site. The first Bitcoin faucets would often give away 5 Bitcoin for free at a time, which was then worth less than 5 cents..
Over time, faucets became more common, and one had to do more and more tasks to get any significant amount of Bitcoin. You would have to play a game to get your free bitcoin, or watch a video, or click on ads. As the value of Bitcoin increased, faucets gave away less and less Bitcoin per log-in. Soon, faucets were no longer needed to make people more familiar with Bitcoin, as the fast rise in value and media attention was already achieving this. Faucets continued their existence but turned into advertising platforms.
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