How to check if a token’s Liquidity is locked
Table of Contents
How to check if a token’s Liquidity is locked
Read all about how to check if liquidity is locked.
Decentralized exchange (DEX) like pancakeswap utilize liquidity pool (LP) to facilitate the trading of a particular asset that’s being listed on the exchange.
The liquidity provider/developer deposit an equal value of two token to create a pair within which the depositor receives a share of pools for every trade of the asset that the liquidity is provided for.
The provider of the liquidity can take away the liquidity and claim the shares of the pool at any time. For investors looking to invest in a token that is not listed on a centralized exchange, the ability to remove liquidity at any time by the provider of the liquidity is a red flag against investing in such token.
Once the liquidity is removed by the developers, asset investors won’t be able to sell the asset back to a valuable asset.
In other to avoid being in such a situation, you will have check if the liquidity of a token is locked to prevent it being rug pulled.
In this post, I am going to be writing about all you will need to know about how to check if a token’s liquidity is locked, the duration it was locked for and more.
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Let’s get into it then…
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What is Liquidity?
Liquidity in cryptocurrency simply means how easily a particular token can be bought or sold without it affecting the asset price.
What does it mean to lock liquidity?
Locking liquidity is the process of locking up an LP token by transferring it to a smart contract for a certain period of time i.e. during this period, the developer will not be able to remove the locked fund for a period of time.
How to check if liquidity is locked?
Follow the below instructions to check if liquidity is locked in Bscscan:
- Go to Bscscan.com
- Enter the contract address of the token you are analyzing
- Navigate to the token overview you want to analyze
- Click on HOLDERS and click on the address tagged as the name of the token you are analyzing
- Click on the address under filtered by the token holder
- Click on the Pancake LP under the token tracker
- Click on holder and then click on the first address
- Click on the address under filtered by the token holder on the next page
- Click on Contract and then click on READ
- From there, you will be able to tell if the token’s liquidity has been locked.
It is also possible that the token developer only locked the liquidity for a very short amount of time, say like 1 week or 2 weeks, thereafter they will be able to remove liquidity.
You must check the duration on which liquidity has been locked, so you don’t get caught unawares, you can do that by following the below instructions:
- Copy the numbers under “Release time”
- Navigate to epochconverter.com, and then scroll down and paste the copied numbers in the input box
- Click time stamp to human date
- It will show you the time the liquidity has been locked for.
Summary
Before investing in any token, you should always check if the liquidity has been locked and also for how long. There are many scam tokens that remove liquidity once they have enough investors in an asset, leaving you with a worthless token.
With the above, you should be able to check if a token’s liquidity is locked and also the duration it is locked for, to help you make well informed decisions on assets to put your money in.
Conclusion
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