Locked Liquidity

When a token project creates a liquidity pool (e.g., TOKEN/ETH on Uniswap), the founding team typically receives the LP tokens representing their ownership of that pool. Without locked liquidity, founders can instantly withdraw all ETH from the pool at any time — this is the mechanism behind most rug pulls. Locked liquidity means the LP tokens are deposited into a third-party time-lock contract (Unicrypt, PinkSale, Team.Finance) for a specified period, typically 6 months to 2 years. During this time, no one — not even the team — can withdraw the underlying liquidity.

The verification process matters. A reputable lock must be verifiable on-chain: you should be able to check the lock transaction, confirm it's using a legitimate locker contract, verify the lock duration, and confirm the amount locked matches the pool's total liquidity. Projects that claim 'locked liquidity' without providing a verifiable on-chain transaction should be treated with extreme suspicion. Platforms like Unicrypt and Team.Finance provide public dashboards showing all active locks.

Critically, locked liquidity is a necessary but insufficient safety signal. It prevents liquidity rug pulls but does nothing to prevent: minting unlimited tokens via admin keys, malicious upgrades to smart contracts, team dumping their (unlocked) token allocation, or simply abandoning the project after the lock expires. A more comprehensive security review includes checking contract ownership/admin functions, token allocation vesting schedules, team wallet activity, and whether the contract is verified and audited. Alpha Factory's /scam-check tool covers these dimensions.