PancakeSwap Decentralized Exchange (DEX) serves as Binance Smart Chain’s primary liquidity provider. Following your BEP20 token’s deployment on the BSC network, the next step is to create and add liquidity to PancakeSwap. Liquidity enables automated and instant decentralized trading of your tokens without the need for slow peer-to-peer (P2P) transfers. PancakeSwap was forked from the well-known Ethereum exchange Uniswap, and it recently released the V2 version of its liquidity platform.
PancakeSwap V2 requires you to create a liquidity pool (LP) and then add your newly minted tokens and funds to it. The funds are added in the form of value tokens, most commonly BNBs. PancakeSwap uses a smart contract to manage the liquidity pool, which owns the new tokens and BNBs as well. Additionally, the same contract mints LP tokens, 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 to withdraw previously deposited tokens and BNBs from the pool contract. This is typically done after the new coin gains sufficient traction and the community contributes additional tokens to the liquidity pool.
PancakeSwap liquidity, as a result, is a critical component of the BSC tokens. Unfortunately, it has been used in a popular scam known as “rugpulls.” Even when the community contribution is insufficient, token owners prematurely cash out their LP tokens to obtain liquidity funds. As a result, token purchasers find themselves stranded, unable to sell and recover their investment. To avoid this scam, the concept of liquidity locking was introduced. In this concept, ownership of LP tokens is temporarily transferred to a separate lock smart contract, preventing funds from the PancakeSwap pool from being withdrawn.
Token creators must now lock their Pancake-LP tokens before launching legitimate BEP20 tokens. Nobody would ever purchase your token if it lacked a liquidity lock. As a result, all new project owners are actively seeking viable methods of securing LP tokens.
Ways to lock liquidity pool (LP) tokens on PancakeSwap
The more time-consuming and difficult option is to create your own time-lock contract. While developing and testing such a contract takes considerable time and effort, investors are suspicious of this practice. The time-lock contract may contain backdoors that allow the lock to be broken early.
The simpler option is to use a reputable third-party locker. These lockers employ an automated time-lock contract to safeguard your LP tokens for a predetermined period of time. Following the expiration of the lock period, you can retrieve your LP tokens in your wallet.
Mudra Locker is a new and rapidly growing platform to lock liquidity on PancakeSwap. What distinguishes it are its features and pricing. It introduced several innovative features for a liquidity locker, such as lock certificates based on QR codes. It features an intuitive and simple-to-use interface. The platform charges the lowest fees on the market. As a result, it has emerged as the best BSC liquidity locking platform.
Mudra Locker is launched by Mudra Manager, which has also introduced a token creator to create BEP20 tokens and a token scan tool.