What Is the Consequence If the Liquidity Lock-up Expires? ⎊ Path

What Is the Consequence If the Liquidity Lock-up Expires?

When the lock-up expires, the control of the liquidity pool tokens reverts to the wallet that initiated the lock, typically the project team. At this point, the team regains the ability to withdraw the underlying assets (the liquidity).

If they choose to withdraw the assets and not re-lock them, it can lead to a soft or hard rug pull, causing the token price to crash.

How Does a Vesting Schedule Mitigate the Risk of a Rug Pull?

What Was the Primary Consequence of the DAO Attack on the Ethereum Blockchain?

What Is the Risk of Team Members Selling Tokens after a Lock-up Expires?

Why Is an Anonymous Development Team a Major Red Flag for Investors?

What Are the Implications of a Team Holding All Tokens under a Simple Lock-up versus a Vesting Schedule?

What Is the Difference between a ‘Hot Wallet’ and a ‘Cold Wallet’ in Terms of Private Key Security?

How Do Investor Lock-Ups Differ from Team Lock-Ups?

What Mechanism Allows Developers to Initially Control a Large Portion of a Liquidity Pool?

Glossar

Liquidity Pool Tokens

Mechanism ⎊ Liquidity Pool Tokens represent a proportional claim on the underlying assets within a decentralized exchange’s liquidity pool, functioning as a receipt for deposited funds.

Liquidity Lock

Mechanism ⎊ Liquidity lock, within cryptocurrency and derivatives, represents a contractual restriction on the immediate transferability of an asset, typically tokens, for a defined period.