> ## Documentation Index
> Fetch the complete documentation index at: https://docs.magna.so/llms.txt
> Use this file to discover all available pages before exploring further.

# Contract Types

> Magna offers two smart contract types — Claim and Direct Transfer. This page explains how each one distributes tokens and when to use it.

When you create a smart contract, you first choose its **type**. The type determines how tokens reach your stakeholders and can't be changed after creation, so pick the one that matches how you want to distribute.

<Frame caption="Choosing a contract type when creating a smart contract. Each option shows how it distributes tokens.">
  <img src="https://mintcdn.com/magna-bc9e7a48/mlT8vjO-shzShmSb/images/admins/smart-contracts/create-smart-contract-modal.png?fit=max&auto=format&n=mlT8vjO-shzShmSb&q=85&s=4fdf7d1b29bdbb6468a3b906b4b5b113" alt="Create Smart Contract panel showing the Claim and Direct Transfer options" width="2660" height="1740" data-path="images/admins/smart-contracts/create-smart-contract-modal.png" />
</Frame>

## Claim

Lock up tokens in an on-chain **escrow contract** and let recipients claim them as they vest or unlock. You fund the contract once (at the contract level, using a top-up approach) rather than funding each allocation separately, and stakeholders pull their tokens from the contract when they're releasable.

Choose **Claim** when you want:

* An escrow contract that holds tokens on-chain until they're claimed.
* Stakeholders to claim on their own schedule, through their portal.
* To fund the whole contract in one place instead of per allocation.

<Note>
  After a Claim contract is deployed, it appears in the contract list labeled as an **Airlock Escrow Contract** — this is the underlying escrow contract that powers the Claim experience. It's the same contract you created as "Claim."
</Note>

## Direct Transfer

Send tokens **straight to recipients' wallets** (an airdrop-style distribution). There is no escrow contract holding the tokens — instead, you sign a separate transfer transaction for every unlock period when the tokens become releasable.

Choose **Direct Transfer** when you want:

* Tokens delivered directly to wallets rather than claimed from a contract.
* No on-chain escrow.
* To push tokens out yourself at each unlock, rather than having stakeholders claim.

<Warning>
  With Direct Transfer there's no escrow contract to pre-fund, so the [fund](/admins/product-guides/smart-contracts/how-to-fund-a-contract) and [defund](/admins/product-guides/smart-contracts/how-to-defund-a-contract) actions don't apply. You distribute Direct Transfer tokens per unlock from the allocations flow — see [How To Fund Airdrops](/admins/product-guides/how-to-fund-allocations/how-to-fund-airdrops).
</Warning>

## At a glance

|                                 | Claim                                   | Direct Transfer                    |
| ------------------------------- | --------------------------------------- | ---------------------------------- |
| On-chain escrow contract        | Yes                                     | No                                 |
| How stakeholders receive tokens | Claim from the contract as they unlock  | Sent directly to their wallet      |
| How you fund                    | Deposit into the contract once (top-up) | Sign a transfer each unlock period |
| Fund / Defund a contract        | Yes                                     | Not applicable                     |

<Tip>
  For a deeper breakdown of the trade-offs, read our [explainer on Airdrop vs. Claim](https://www.magna.so/blog/airdrop-vs-smart-contract-which-is-better-for-token-vesting).
</Tip>