To understand liquidity locks, it's important first to understand how decentralized exchanges (DEX) and Liquidity Pools (LP) work and operate. We recommend checking out the following video if you aren't already familiar.
Locking liquidity prevents holders of liquidity provider tokens (LP tokens) from withdrawing their funds from a liquidity pool. This is achieved by sending holders' LP tokens to a time-locked smart contract, usually through liquidity-locking services like Team Finance. Token holders can set specific time durations for unlocking the funds, split locks into smaller locks with different owner addresses and end dates, and transfer ownership of a lock to another wallet address. While the lock is active, the token holder cannot access the tokens.
Once the lock expires, the token holder can withdraw their LP tokens using the 'Claims' dashboard on Team Finance. These LP tokens can then be redeemed for the token pair within the liquidity pool on a decentralized exchange (DEX) (e.g. SWAP/ETH on Uniswap). Liquidity pools are token funds locked into a smart contract that users provide to facilitate trading on a decentralized exchange (DEX).
What are Liquidity Pool (LP) Tokens?
Liquidity Pool (LP) Tokens are a type of cryptocurrency token representing ownership of a portion of the tokens contained within a liquidity pool. When you list a token on a decentralized exchange (DEX) such as Uniswap or contribute to an existing token pair pool, you will receive what is known as 'Liquidity Pool (LP) Tokens.'
For example, if you create a Liquidity Pool pairing for SWAP/ETH on Pancakeswap and have 50% of all tokens in the pool, you are entitled to 50% of all the LP tokens and 50% of any generated trading fees.
Liquidity lockers can help prevent fraudulent activity (i.e., "rug pulls"), where the primary liquidity provider redeems all their LP tokens, leaving other investors unable to sell. Locking liquidity demonstrates a commitment to responsible and transparent liquidity pool management. Our platform publishes your lockup details and project information in an easy-to-read display, giving your investors confidence and security.
- 1.Lock tokens in seconds. Fast, safe and secure lock-up of LP tokens on 15+ unique blockchains.
- 2.Bulletproof smart contracts. You don't want to take bets or risks on unproven solutions with something as important as your LP tokens. We've held up to $6 billion USD in total value locked (TVL) via our smart contracts and worked with +30,000 projects.
- 3.World-leading features. For any need you have, we (most likely) have a solution:
3. 24/7 support. We understand the importance of getting your locks right. That's why we have comprehensive support via Telegram to help with any questions or issues, day or night.
4. Display your lockups to investors. Share your individual token page dashboard and display your lockup details, vesting schedule, token metrics, and more.
5. Non-Custodial, Secure & Audited Smart Contracts. Our audited smart contracts securely lock your tokens for the duration you specify. We never take custody of your tokens and do not have access to them. They are only accessible by you and can only be withdrawn after the locking period has passed.
Projects can use Liquidity Locks after they supply liquidity to a DEX.
1. Under "Create New Lock," select the chain where the token you are locking is built and Continue.
2. In step 2, select: "Liquidity Tokens" to lock LP tokens on your desired blockchain and continue connecting your private wallet by selecting "Connect Wallet."
Make sure you connect using a Team Finance-compatible wallet such as Metamask or Coinbase Wallet to complete the above steps.
3. Once connected, enter the token address for the token you would like to lock. Continue.
4. Confirm the token you wish to lock up liquidity for by reviewing the information in step 3 and selecting 'Continue.'
5. In step 4, type in the amount of your token you wish to lock in the 'Lock Amount' box. Set the duration for your lock period by selecting the unlock date (month, day, year) and time of unlock. Pay the service fee for your appropriate blockchain. Select Approve & Lock to continue.
Congratulations! You have successfully locked your LP Tokens on Team Finance. Use the dashboard to see My Lockups, claim, and use other Team Finance services.