Why Locking Liquidity Matters in Crypto Projects
In crypto, liquidity is a pool of funds allowing investors to buy or sell tokens without delay, typically created by pairing a new token with a stable asset like ETH or BNB on DEXs such as Uniswap or PancakeSwap.
Locking Liquidity is Crucial as it helps prevent "rugpulls," where developers might withdraw liquidity after investors have bought in, leaving them with worthless tokens.
By locking the liquidity pool (LP) tokens via a time-lock smart contract, developers temporarily renounce control, boosting investor trust and signaling legitimacy.
Key Points to Consider When Locking Liquidity:
Lock Duration: Minimum one year is recommended; longer locks (3-5 years) strengthen investor confidence.
Amount to Lock: Locking at least 80% of liquidity is best to avoid red flags.
Trading Impact: Locking liquidity doesn’t hinder token trading but ensures fund security.
Third-Party Lockers: Using trusted lockers like Mudra Locker on BSC adds an extra layer of security, popular with over 250 projects.
🤔 How Many Crypto Users Are There?
According to the State of Crypto report by a16z, the global number of crypto users has reached 617 million. However, the actual number of active users is much lower—between 30 to 60 million.
The report states that most people just hold their crypto without actively trading or interacting with the market.
A fun fact: of those active addresses, 100 million are thanks to meme coins on Solana. But we’re still wondering if a16z counted the 300 million "users" from Hamster Combat... 😁
The discrepancy is due to a16z filtering out bots, duplicate wallets, and accounts with minimal balances, and cross-referencing wallet activity with platforms like MetaMask and Farcaster.
In short, while 617 million own crypto, only about 5-10% are really doing something with it!
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