Locking Liquidity
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Liquidity locking is an essential tool for projects that want to build trust and transparency with their investors. Locking liquidity ensures that the liquidity provider (often the project team) cannot withdraw their liquidity from the pool for a specified period, safeguarding investors from potential risks like a rug pull. Below is a guide to how liquidity locking works using the Botega interface.
To access the liquidity locking menu, you first need to have an existing liquidity pool. Once your pool is created:
Navigate to Your Pool: Find the pool where you've provided liquidity.
Click on "Details": This will bring you to the pool’s detailed view, which includes the liquidity locking options.
Select the Pool:
In the details view, the widget will display the relevant LP tokens (liquidity pool tokens) that represent your share of the pool (e.g., Botega LP [TokenA]/[TokenB]).
Specify the Amount to Lock:
Enter the number of LP tokens you want to lock. You can input the amount manually or use quick-select buttons (e.g., 10%, 25%, 50%, 75%, or 100%) to lock a portion of your liquidity.
Set the Lock Period:
Choose the duration for which you want to lock your liquidity. Available periods include options like 3 months, 6 months, 1 year, 2 years, or 4 years.
The widget will display the exact date and time until which your tokens will be locked once you select a duration.
Confirm and Lock:
After reviewing the lock amount and period, click Lock Tokens to lock your LP tokens in the smart contract. Once locked, you will not be able to withdraw the liquidity until the lock period expires.
Investor Trust: Locking liquidity shows a strong commitment to the project's longevity, reassuring investors that their assets are safe and the team has no intent to withdraw liquidity prematurely. This helps prevent risks like rug pulls.
Transparency and Accountability: All details of the locked liquidity—such as the amount locked and the lock expiration date—are available for investors to see, enhancing the project's credibility.
Market Stability: Locked liquidity supports the stability of the token market by ensuring that there is a reliable amount of liquidity in the pool for an extended period, reducing the chances of sudden price fluctuations caused by liquidity withdrawals.
Once the lock period expires, you can return to the pool’s Details section and use the Claim Locked Tokens functionality:
Claim Locked Tokens: Input the number of unlocked LP tokens you wish to claim, and they will be released back to your wallet.
Liquidity locking is a critical feature for building investor confidence and ensuring the long-term stability of your project. It allows liquidity providers to lock their tokens securely, creating a more trustworthy and transparent environment. To access this feature, simply navigate to the Details section of your pool and follow the steps to lock your liquidity for a specified period.
