Explaining Token Locking and Liquidity

token liquidity
July 20, 2021
Chris Vermeulen

Liquidity providing is a vital element of cryptocurrency trading and investing more generally. It’s a practice that is useful to know if you want to invest wisely and continue to grow your crypto wealth.

You can read more about our liquidity reserves and the incentivised liquidity mining programs associated with the funding of our new game The Crypto Prophecies,here.

In this blog, though, we will be discussing the basics of coin and token liquidity providing, its benefits and why you might consider it.

What is Liquidity and Liquidity Providing in Crypto

When it comes to cryptocurrencies, liquidity is a pool of funds that token and coin developers/owners must create to ensure their investors can buy and sell when they wish. Without a liquidity pool, Investors will have to wait for a buyer or seller to match their order. There is no guarantee that this will happen, or how long it might take, without a liquidity pool of coins or tokens available.

A liquidity pool is created by creating a fund of new tokens, like the TCP token, with another established token, like Ethereum. When buying new tokens from an exchange, more established coins and tokens will accumulate in the liquidity pool as investors pay for the new tokens with established tokens. The reverse happens if the new token is sold.

The Benefits of Liquidity Providing

From an investors point of view, buying a new token for a crypto project which uses a locked liquidity pool provides a level of security and curtails any opportunities for token developers to pull off what’s known as a ‘Rugpull’. A ‘Rugpull’ is a situation in which a developer accumulates tokens or coins of established value from investors, withdraws all the liquidity from the pool, cashes in the value and does a runner! Through locking liquidity, unscrupulous developers are prevented from escaping with valuable coins or tokens.

Liquidity Mining

Liquidity mining is another important part of crypto projects and cryptocurrency investment. These systems reward investors who provide liquidity to a project, also known as liquidity providers. Whenever a user trades tokens within a liquidity pool, they pay a predefined fee. This fee is then distributed proportionally to each liquidity provider as a reward for bringing capital to market.

Grow Your Crypto Wealth With The Crypto Prophecies

Our new game, The Crypto Prophecies, provides an engaging and immersive gaming experience, where players can battle in zero-sum price prediction matches, nurture the skills of characters, grow wealth by winning wagers and collect valuable NFTs. We’re well on the way to our launch now, with the Open Beta Launch scheduled on the roadmap for later this year. Join the community to learn more about the game and prepare for the much-anticipated launch!

If yousign up with ustoday, you can claim $5 bTCP tokens! These tokens are the official currency of the game and can help you rise through the ranks of the leaderboard and begin your own Crypto Prophecy!


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