We’ll talk about what locked liquidity is and how to access it

What Locked Liquidity is?

Liquidity actually means how quickly an asset can be converted to real cash. The more liquid an asset is, the more valuable it has. This liquidity is very important as, without it, investors might not be able to buy or sell orders unless someone comes and matches them. Anyone who adds liquidity to the pool gets tokens that can later be used to withdraw their funds from the pool.

So what does locked liquidity mean? Liquidity locking is the process of setting up a fund pool and locking it for a defined period of time. Locking liquidity makes the funds immovable until they are unlocked. This means that a certain percentage of the asset has been locked and can not be withdrawn by the developers which give investors a sense of security against their investments. Liquidity is locked using time-locked smart contracts.

Why is Locked Liquidity important?

Locking liquidity is important to avoid any “rug-pull” situations where the developers end up withdrawing coins of major value from the pool which might result in loss of liquidity of the main token against which the pools were created. In short, liquidity pools are important for securing the liquidity of the token against which the pools are created.

Locked liquidity is highly promoted to ensure security and that the contract developers might not access the liquidity pool to steal any funds. This easily can help differentiate between scam and real projects. If no liquidity is locked, the developers might get a chance to drain the liquidity and walk away scamming the investors.

How to access the Locked Assets?

All the locked tokens can be withdrawn once the locking time period is over. Before that time, no locked assets can be accessed or withdrawn. To withdraw any locked asserts, you simply go to the locked pool and withdraw your assets against the pool tokens.