When liquidity is added to a trading pool, the provider receives LP tokens representing their share. Whoever holds those LP tokens can withdraw the liquidity. A creator who keeps them can "pull the rug" by removing the pool.
Locking versus burning
- Locked. The LP tokens sit in a time-lock contract until a set date. Check the unlock date, because a lock ending next week offers little protection.
- Burned. The LP tokens are sent to an address nobody controls, so the liquidity can never be withdrawn by anyone.
What it does and doesn't protect against
A burned or long-locked pool removes the classic liquidity pull. It does not stop holders dumping their supply, bundled wallets selling, or contract tricks like changeable taxes. Launchpad tokens that graduate often have their liquidity burned automatically. Check what your launchpad does.
Educational content only. Not financial advice.