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

Developers are the initial largest liquidity providers, holding LP tokens that grant them the power to withdraw the majority of the pool's assets.
Greeks.Live17.11.25

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

Developers often create the initial token supply and pair a significant amount of it with a base asset, like Ethereum (ETH), to seed the liquidity pool. Since they are the first and largest liquidity providers (LPs), they receive LP tokens representing their share.

Holding these LP tokens gives them the power to remove their entire initial contribution, effectively draining the pool. This control is established at the project's inception.

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