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What is liquidity locking.

Liquidity locking is the practice of time-locking a project's liquidity pool (LP) tokens in a smart contract so they cannot be withdrawn before a set date. It prevents a project team from removing the liquidity backing its token — a “rug pull” — and is one of the clearest on-chain trust signals a new project can provide. On TrustSwap, liquidity locking is handled by Team Finance through non-custodial, audited contracts.

Definition

Liquidity locking means depositing the LP tokens that represent a project's position in a decentralized exchange pool into a time-locked smart contract. While locked, those LP tokens cannot be moved or redeemed, so the underlying liquidity stays in the market until the lock expires.

How liquidity locking works

When a project adds its token and a base asset (such as ETH or USDC) to a DEX liquidity pool, it receives LP tokens representing that share. Whoever holds the LP tokens can withdraw the underlying liquidity. Liquidity locking puts those LP tokens into a smart contract with a fixed unlock date, so:

  • the liquidity cannot be pulled before the lock ends,
  • the lock terms are publicly verifiable on-chain, and
  • the contract — not the team — controls release.

The trust problem it solves

A common scam in Web3 is the "rug pull," where a team launches a token, attracts buyers into the liquidity pool, then withdraws all the liquidity and disappears, leaving holders with worthless tokens. Locking liquidity removes that possibility for the duration of the lock, which is why investors often check for a verifiable liquidity lock before participating in a new project. A visible lock turns a promise ("we won't pull liquidity") into an enforced, on-chain fact.

How TrustSwap handles liquidity locking

On TrustSwap, liquidity locking is provided by Team Finance. Locks are created through non-custodial smart contracts that TrustSwap cannot access or reverse, are immutable once deployed, and are independently audited by CertiK, Hacken, BailSec, and Zokyo. Anyone can verify a lock on-chain, which lets a project demonstrate credibility before it markets its token. Team Finance supports liquidity locking across 26 blockchain networks.

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