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How to lock liquidity on PancakeSwap

PancakeSwap is the primary liquidity provider platform for Binance Smart Chain (BSC network). After you have deployed your BEP20 token on the BSC network, the very next step is to create and add liquidity on PancakeSwap.

The liquidity allows automatic and instant decentralized trading of your tokens without waiting for slow P2P transfer. PancakeSwap was forked from the well-known Ethereum exchange Uniswap, and the V2 version of its liquidity platform has been recently released.

On PancakeSwap V2, you first create a liquidity pool (LP), then add your newly minted tokens and funds to this pool. The funds are added in the form of tokens of value, usually BNBs. PancakeSwap deploys a smart contract to manage the liquidity pool, which holds both the new tokens and BNBs.

It also mints LP tokens from the same contract, which you receive in your wallet as proof of liquidity ownership. The LP (also known as Pancake-LP or simply Cake-LP) tokens can be used for withdrawal of the deposited tokens and BNBs from the pool contract at a later time. This is usually done once the new coin has gained enough traction and the community has deposited additional tokens into the liquidity pool.

As a result, PancakeSwap liquidity is an essential component of the BSC tokens. Regrettably, it has been used in a well-known scam, “rugpulls.” Even when the community contribution is insufficient, token owners withdraw liquidity funds prematurely by cashing out their LP tokens.

As a result, token buyers are left stranded, with no way to sell and recoup their investment. The concept of liquidity locking was introduced to avoid this scam. The ownership of LP tokens is transferred to a separate lock smart contract for a set period of time in this concept, preventing the PancakeSwap pool funds from being withdrawn.

Token creators are now required to lock Pancake-LP tokens in order to launch legitimate BEP20 tokens. Nobody would buy your token if it didn’t have a liquidity lock. As a result, all new project owners are looking for viable ways to secure LP tokens.

PancakeSwap liquidity can be locked in a variety of ways

Writing your own time-lock contract is a more time-consuming and difficult option. While creating and testing such a contract requires a significant amount of time and effort, investors are wary of this practice. There could be backdoors in the time-lock contract that allow the lock to be broken early.

Using a trusted third-party locker is the easier option. These lockers use an automated time-lock contract to keep your LP tokens safe for a set amount of time. After the lock period expires, you can retrieve your LP tokens from your wallet.

Mudra PancakeSwap liquidity lock platform is one of the latest and fastest-growing liquidity lock platforms. Its features and pricing are what set it apart. It has introduced several unique features for a liquidity locker, such as QR code-based lock certificates.

It has a user interface that is both intuitive and simple to use. The platform has the most affordable fees on the market. As a result, it has become the most talked-about BSC liquidity locking platform.