Unlike an airdrop, a lockdrop streamlines the distribution of tokens.
What Is a Lockdrop?
After the lockup period, youll receive your ETH and the new tokens.
During the lockup period, your locked tokens are not burned or staked.
This could lead to a stronger connection of project participants.
How Do Lockdrops Work?
The tokens to be locked are usually a predetermined cryptocurrency, like Ether (ETH).
After the lock period, which can span several months or years, the locked tokens are released.
The value of the tokens may increase or decrease during the lock period.
This is usually due to the projects success and market volatility.
Airdrops are often used to increase project awareness.
An airdrop distributes tokens to a specific group of people, usually for free.
Locked tokens are typically restricted from being transferred for a certain period.
A smart contract attached to the participation determines the lock periods duration.
The expected new tokens are usually delivered after the project funding is successful.
This way, the token increases in value, the holders gain, and the project is successful.
This can make it more accessible to a wider range of people, thus expanding its reach.
Also, lockdrops are usually seamless, as onlya cryptocurrency walletis required apart from the tokens.
The existing tokens are secure as the value isnt stored.
Many popular projects took off with lockdropping, or incorporated it as they progressed.
Parties interested in holding EDG had to hold Ether (ETH) to participate in the lockdrop.
90% of the five billion EDG tokens created were distributed through the lockdrop.
Astroport
In December 2021,Astroportlaunched a lockdrop to distribute 7.5% of 1 billion ASTRO tokens.
Seventy-five million ASTRO tokens were given to users who locked Terraswap LP tokens for a trial period.
