When launching a new cryptocurrency, developers often claim that liquidity is locked—statements like "Two million dollars in liquidity is locked" or "95% of tokens are locked for one year." While these declarations aim to inspire confidence, they don’t always reflect reality.
Locking liquidity is a security measure designed to prevent scams like rug pulls or price manipulation. However, verifying these claims is crucial before investing. This guide explains how to confirm whether a token’s liquidity is genuinely locked—and why it matters.
What Does Locked Liquidity Mean?
Locked liquidity refers to funds or tokens secured in a smart contract for a predetermined period. This mechanism prevents sudden withdrawals, ensuring stability and investor trust.
Why It Matters:
- Prevents Rug Pulls: Scammers can’t drain liquidity pools abruptly.
- Reduces Price Volatility: Large sell-offs are delayed, minimizing price crashes.
- Builds Trust: Projects with locked liquidity appear more credible.
👉 Learn more about avoiding crypto scams
Risks of Unlocked Liquidity:
When locking periods expire, liquidity becomes accessible. If the token lacks strong community backing, sudden sell-offs can crash prices.
How to Check if Liquidity Is Locked
Method 1: Block Explorer (Manual Verification)
Tools: Etherscan (Ethereum), BscScan (BNB Chain), etc.
Step-by-Step:
Find the Token Contract:
- Search the token’s name/address on Etherscan or a relevant explorer.
Check "Holders" Tab:
- Look for contract addresses (marked with an icon).
- Identify LP (Liquidity Pool) lockers (e.g., tagged "LP Lockers").
Review Lock Details:
- Click the top holder’s address.
- Navigate to "Token Transfers" → Check the "Txn Hash" for the deposit.
- Under "Logs", find
unlockDate(timestamp in HEX). - Convert the timestamp using UnixTimeStamp.
Example: Floki Inu’s liquidity unlocks in 264 years—verifying long-term security.
Method 2: Automated Tools
1. Unicrypt (UNCX Network)
- Visit Dashboard
- Search token → Check "Lock Liquidity" tab.
2. Team Finance
- Browse Locked Tokens
- Lists projects with liquidity locks.
3. DEXTools
- Analyze Pools
- Shows locked/unlocked ratios under "Pool Info."
👉 Explore advanced DeFi analytics
FAQ
Q1: How much liquidity lock is ideal?
- Aim for 85%+ locked to ensure price stability.
Q2: Can locked liquidity still be risky?
- Yes—if unlocked suddenly, whales might dump tokens.
Q3: Do all projects lock liquidity?
- No. Always verify via block explorers or tools like DEXTools.
Key Takeaways
- Use block explorers for manual verification.
- Trust third-party tools (DEXTools, Unicrypt) for quick checks.
- Prioritize tokens with long-term locks (e.g., years).
For deeper blockchain insights, read our guide on How to Read Block Explorers.
Core Keywords:
- Locked liquidity
- Rug pull prevention
- Token security
- DEXTools
- Unicrypt
- LP tokens
- Smart contract audit
- Crypto scams