What is a Lockdrop? How is it different from an airdrop?

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But what is a lockdrop, and how does it work?A lockdrop is a modified version of an airdrop which allows anyone to become a token owner and stakeholder of a protocol in advance. However, instead of merely being mass distributed to random wallet addresses, a lockdrop ensures that only a select group of users receive the tokens.To be a part of this select group that receives the free tokens, all you have to do is show your commitment to the project by locking a certain amount of your already owned token in a smart contract.

These tokens are not staked or burned. They are just locked away for a while to indicate your interest in the project and its token.Also Read | What is Stripe Connect: The platform that will help Twitter creators get paid in cryptocurrencyFor instance, the holders could be asked to stake a minuscule amount of their Ether to receive a sizeable amount of the new token.

Generally, the more tokens you commit and the longer you keep them locked in, the more tokens you can receive in the new network.Once the smart contract is concluded, the locked tokens are sent back to your wallet along with the new tokens. As such, lockdrops are an excellent way for developers to build a community of relevant users.

They are also a great way for investors to receive free tokens and become early project stakeholder.How are lockdrops different from airdrops?In most cases, airdrops distribute tokens to hundreds of thousands of random wallet addresses. The hope is that recipients will engage with the corresponding project.

However, the tokens often sit in the wallet, completely unnoticed.In some cases, the wallets/users are chosen based on their past actions. They could be high-value users or have been part of a competitor's