What Is a Liquidity Lock? Locked vs Burned Liquidity Explained
5 min read · Updated
Every token you can trade on a DEX has a liquidity pool behind it. Whoever controls that pool can empty it, and that is how most rug pulls work. A liquidity lock takes that power away. Here is how it works and how to check it.
How liquidity pools and LP tokens work
When a developer launches a token on Uniswap, PancakeSwap or Raydium, they deposit the token together with ETH, BNB, SOL or a stablecoin into a pool. In return they receive LP (liquidity provider) tokens, a receipt that lets them withdraw their share of the pool at any time.
If the developer keeps those LP tokens in their own wallet, they can pull the whole pool in one transaction. The price then collapses because there is nothing left to sell into.
Locked liquidity
Locking means sending the LP tokens to a time-lock contract (such as PinkLock, Unicrypt or Team Finance) that releases them only after a set date. Until then nobody, including the developer, can withdraw the liquidity. Check how long the lock lasts: a lock that ends next week protects you for a week.
Burned liquidity
Burning means sending the LP tokens to a dead address that nobody controls. The liquidity can never be withdrawn. Pump.fun tokens that graduate to Raydium or PumpSwap have their liquidity burned automatically, which is why “LP burned” is common on Solana memecoins.
What a lock does not protect you from
A liquidity lock removes one risk, not all of them. Always check holders, taxes and owner powers too.
- The developer dumping tokens they hold in their wallets
- A mint function creating new tokens to sell
- High or changeable sell taxes
- A honeypot that blocks selling
How to check it
Paste the contract address into the CoinsWavez rug checker. The token page shows what percentage of the liquidity is locked or burned. On a brand-new token, aim for 80% or more.