What Is a Locked Liquidity Pool and How to Verify It
What is a locked liquidity pool, and how can you verify one? A locked pool holds the liquidity tokens of a trading pair in a time-lock contract, so the creator cannot withdraw the funds until the lock ends. You verify a lock by finding the pool, checking who holds its liquidity tokens and reading the lock contract's end date. What is a locked liquidity pool? A decentralized exchange lets anyone create a market by depositing two assets into a pool, usually a new token and a base asset such as the network's main coin or a stablecoin. In return, the depositor receives liquidity provider tokens, often called LP tokens. These LP tokens are a claim on everything inside the pool. Whoever holds the LP tokens can remove the liquidity at any time. If a token's creator holds them, the creator can drain the pool, leave buyers with tokens that cannot be sold at a fair price, and walk away. This pattern is commonly called a rug pull. A lock addresses that risk. Instead of keeping the LP ...