【What happened】
Many token-checking pages say “LP locked,” which looks reassuring. But locking and burning are two different things: the former is only temporary, while the latter is permanent destruction. We came across a case a few days ago: the checker showed that 100% of the LP was locked, but shortly after we bought in, the pool was drained.
【Why】
LP tokens are proof of ownership of the assets in a pool. Whoever holds them can withdraw liquidity. If LP tokens are held in an address controlled by the token creator, or in a contract that allows early unlocking or changing the unlock time, then “locked” is just a label. One withdrawal transaction can drain all the SOL from the pool, sending the token price to zero and leaving you unable to sell your tokens.
【How to identify】
1. Check the LP token holders on a block explorer and see whether most of them are held by a burn address. That’s what a real burn looks like.
2. If the tokens are locked in a contract, check whether the unlock period is long enough and whether the contract allows the lock to be changed or unlocked early.
3. Don’t rely only on labels on token-checking pages. Check how the assets in the pool change yourself, and keep monitoring liquidity after buying.
4. Pay attention to where the token was issued: if it wasn’t launched on its original issuing platform but has a pool created elsewhere, be extra cautious.
【Our rules】
We don’t give a pass to tokens whose LP tokens haven’t truly been burned just because they’re labeled “locked.” We never buy tokens that weren’t issued on pumpfun but have a self-created pool on PumpSwap. We also check for test sells, holder concentration, insider ownership, and more. If a token fails even one check, we don’t buy it.
【Note】
Burning LP tokens can prevent liquidity from being pulled, but it can’t protect you from honeypots, token minting, or high taxes. It’s one safeguard, not the whole picture.
【Discussion】
When checking LP, do you only look at the “locked” label, or do you check the holders yourself? Share your thoughts in the comments. You can use on-chain tokens like $SOL as examples.
DYOR, not investment advice
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