What is a lockdrop? 

A lockdrop is a means to distribute a protocol’s token to a wide variety of participants. In order to achieve this, participants lock one asset into a smart contract over a predetermined period of time in order to receive tokens in return. After the time period is completed the tokens are returned to the participant. 

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Who invented the lockdrop? 

The first company to introduce the concept of lockdrops is Commonwealth Labs. (https://commonwealth.im/) The company is focused on governance and is founded by Dillon Chen, Raymond Zhong and Drew Stone. Their first lockdrop took place on their Edgeware network, which is a smart contract platform on Polkadot.

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Community Lockdrop in the context of HeliSwap

In the case of HeliSwap the Community Lockdrop is a means to bootstrap liquidity from the community. HeliSwap collects HBAR from the community to create a deep HBAR <> HELI liquidity pool by matching the collected HBAR with HELI tokens and then redistributing ALL LP tokens back to contributors over a three month period. 

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In other words, we give out a large amount of HELI to anyone who provides their HBAR on the Community Lockdrop page. We then merge the pre-announced amount of HELI with the received HBAR to create an HBAR <> HELI Liquidity Pool. ALL LP tokens that are generated throughout this process will be redistributed to participants and vest linearly over a 3 months period. This mechanism helps HeliSwap to create a large initial HBAR <> HELI pool with deep liquidity and allows for a community driven natural price discovery process.

In a further step your already vested LP tokens can then be used to earn additional token rewards by staking them into the HELI <> HBAR yield farming campaign. This is only a suggestion and not financial advice, as already vested LP tokens can be used in any fashion you would like to make use of them. 

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HeliSwap is going to provide 20 million HELI tokens for the Community Lockdrop. That means that if the community decides to provide 20 million HBAR tokens, the ratio of HBAR to HELI is going to be 1 to 1 (for each HBAR people would get one additional HELI token). If the community decides to provide 10 million HBAR tokens, it means that each HBAR tokens will be matched with 2 HELI tokens, and if the community provides 30 million HBAR tokens, it means that each HBAR token will be matched with 0.5 HELI tokens. 

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How does the Community Lockdrop work?

The Community Lockdrop can be explained in three simple steps: 

Step 1: The Lockdrop Pool

• 20,000,000 HELI tokens will be allocated to a so called "lockdrop pool".
• Participants (you) may then decide to lock up their HBAR while the lockdrop-deposit window is open.
• The entire lockdrop process lasts for 7 days. During the first 5 days, anyone may deposit or withdraw their HBAR at will and as many times as desired.
• On days 6 & 7, no more deposits will be accepted. You may withdraw up to 50% of your investment on day 6 and a linearly decreasing amount on day 7 (50%-0%).
• Each participant can only withdraw once after day 5 has ended.

Source: https://app.heliswap.io/lockdrop

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Step 2: Allocation and LP token creation

• Depending on your share of the overall HBAR contribution, we allocate a proportional amount of the 20,000,000 HELI to your position. You can see the overall amount on the vesting page throughout the entire week.
• We then take the HBAR and HELI and turn them into an LP token that will be used on the HBAR/ HELI pool to bootstrap liquidity.
• Over the next 3 months, your LP tokens will vest linearly and you can retrieve them on the same page as you originally deposited your HBAR. The amount of LP tokens you will receive will be directly proportional to the amount of HBAR you have contributed in relation to the total amount of HBAR contributed.

Step 3: Claiming your vested LP Tokens

• During the 3 month linear vesting period, you may decide to vest and redeem portions of your allocated LP tokens.
• Those redeemed LP tokens are yours and you have full ownership of them.
• To make it easy for you, you can also directly stake your claimed LP tokens into our Yield Farm and benefit of the HBAR/HELI APRs (no financial advice).

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For more information please visit: https://app.heliswap.io/lockdrop

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If you are curious about other lockdrops from the past, please check out the ones below: 

Edgware: https://www.figment.io/resources/a-stakers-look-at-the-edgeware-lockdrop

Astroport: https://docs.astroport.fi/astroport/extras/lockdrop

Plasm Network: https://polkadotters.medium.com/plasm-network-lockdrop-a-way-better-airdrop-861da4262fef

Mars protocol: https://docs.marsprotocol.io/mars-protocol/extras/lockdrop

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