Lock Use Cases

Be Your Own Custodian on Ethereum

Lock is a protocol to safely store and distribute Ethereum tokens using smart contracts. As discussed in our introductory article, some of the primary features of Lock are that the protocol:

• Is non-custodial, meaning Lock never has control over users’ tokens.
• Has an emergency unlock, which is a safety feature that can be activated in case of a token upgrade, upcoming chain swap, or other critical emergency where users need to reclaim their tokens.
• Supports airdrops, meaning users won’t miss out on any tokens while they are locked in Lock’s smart contracts.

When setting up a token lock, users can decide whether they will claim the tokens themselves or have them be claimable by someone else.

Use Cases

Hold

There are multiple use cases for holding tokens in Lock contracts for a specific duration. These include:

• Savings Accounts: Lock can be used like a savings account or certificate of deposit. It can also be used to save for a specific purpose, like a future purchase or gift. In such cases, users can just lock their funds and set them to be released at the purchase date.
• HODL: Many cryptocurrecny users want to hold their tokens for a long time. They could be secured with Lock to ensure that they won’t be able to sell until a later date.
• Self-Custody: Locking up assets in a smart contract makes users the custodians of their own digital assets. Each user can set the parameters of how they want their assets to be stored and the smart contract will handle the rest.
• Proofs: Once tokens are locked, users have a proof that assets are coming to them at a later date. This can be used to secure a loan or purchase an asset.

Vest

Vesting is a contractual future payout. Venture capitalists, employers, ICOs, and some business contracts use vesting structures to allocate equity and tokens over time.

Lock’s vesting function enables users to lock tokens until they are ready to be claimed by the correct beneficiary. Here are some of the use cases for vesting:

• Employee shares or tokens: Lock company tokens until the employee has been at the company for 4 years.
• Investor hold: A venture capital firm commits to holding the company’s tokens for 3 years when they invest in the company.
• Send multiple transactions: Send tokens to 100 supporters two years after they make a token purchase in one transaction.

Distribute

Lock enables future payouts to be automatically sent to any designated account. Payouts can be made at any frequency. Some use cases include:

• Annuities: An annuity can be created where the recipient deposits a large amount of capital upfront, which will release at a later date in monthly installments.
• Birthday gifts: Give a gift in the future by creating a lock with the payout on the recipient’s birthday.
• Salaries: A company could lock funds for salaries and release them directly to employees on designated dates
• Allowance: Similar to salaries, allowances can also be distributed automatically through Lock
• Rent/Bill Payments: Rent or bill payments could be locked into an account and distributed at a particular date.

Earn

Earning complements any other use case of the platform. Some tokens will enable time-locked funds to earn fees or interest.

Lock works with tokens to earn interest through lending and fees on the tokens that are locked if the user wants this. Tokens that can be locked include:

• Compound — Earn interest by lending the underlying asset to borrowers.
• Bancor Relay — Earn fees through market making by providing liquidity.
• Uniswap Pool — Earn fees through market making by providing liquidity.
• Chai — Earn interest through the DAI savings rate.
• IDAI — Earn interest through the DAI savings rate and interest from providing liquidity on the Fulcrum lending pools.

Those looking to be disciplined about their savings could lock rDAI to make sure they only spend interest and save the principal.

We can also work with projects individually to set up bonuses if tokens are locked in our contracts for certain durations. Please reach out if this is of interest.

Conclusion

As our platform grows, Lock aims to become the universal platform for locking, storing and allocation of Ethereum based tokens.

Do you have any other use cases for the platform that we haven’t thought of yet? Are there any tokens you would like to see listed that we don’t have yet? If so, please share in the comments below.

In the next article we will share about our development progress to date, as well as our upcoming roadmap.

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