Lockdrop

Written by Justin Pitts

Introduction

A lockdrop is a modified airdrop where users on one network stake tokens for a specified amount of time in exchange for another set of tokens. The amount of time can be variable and the tokens are released through a smart contract. The only cryptoasset to utilize a lockdrop thus far is Edgeware, a product touting governance innovation.

Lockdrops attempt to foster network participation for longer periods of time. A user that has tokens staked has a vested interest in seeing that network succeed. Lockdrops offer an alternative to traditional airdrops, where distributed tokens are often forgotten about or quickly sold. The innovaction is aimed at long-term investors, users that frequently trade cryptoassets are not ideal participants because they will not have access to their tokens.

An incentive for lockdrop participants is to increase the amount of shares received based on how long the tokens are staked-Edgeware offers 1 share for every ETH staked for 3 months, but 1.4 shares for every ETH for 1 year, for instance.

Suggested Reading

What’s in a Lockdrop? by Dillon Chen

Lock Up Ether, Get Free Crypto: Twist on Airdrops Attracts Top VCs by Brady Dale

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