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Liquidity

Is the liquidity locked? How to read a Solana pool

Liquidity is the money you sell into. Three questions: is it real, is it locked, and who can take it out?

Is it real?

Pool liquidity is usually shown as the value of both sides of the pool. The token side is priced at the token's own price, so a pool can claim millions of liquidity while holding almost no SOL. For pools paired with SOL or a stablecoin, real liquidity is about twice the quote side. We once found a fake copy of a real coin claiming $5.6M of liquidity on $0.11 of USDC. Trenchie flags "Pool has almost no real money in it" when the real figure is under a fifth of the claim.

Locked, burned or withdrawable

When someone adds liquidity to a pool they get a receipt (LP tokens, or a position). If that receipt is burned, the liquidity can never be taken out. If it's locked in a locker program, it can't be taken out until the lock ends. Otherwise it's withdrawable by whoever holds it.

Withdrawable isn't always bad

Many healthy pools are withdrawable: market makers and holders add liquidity and take it out as they please. What matters is who holds it. Trenchie looks up the providers of each pool with $1K or more withdrawable and matches them against the dev, bundle and linked wallets. Insiders who can pull 30% or more (and $5K or more) is a red: "Insiders can pull $X". A crowd of ten or more providers with little insider share is a green.

Watch for pulls

Trenchie also watches the liquidity history: removals, who removed it, and whether they sold right after. A pull of more than half the pool is a red; a smaller pull is a caution.

How to check

Paste the contract address into Trenchie. The LP pill in the report's header shows the locked share per pool; the Liquidity panel shows real vs claimed liquidity, the providers and every removal.

Questions people ask

Does locked liquidity mean a token is safe?

No. Locked liquidity stops one kind of rug (pulling the pool), not the other (insiders dumping their tokens into it). Check the launch, dev wallet and holders too.

What does 'LP burned' mean?

The liquidity receipt was sent to an address no one controls, so the liquidity can never be withdrawn.

Keep reading

How to check a Solana token for a rugA step-by-step checklist for checking a Solana memecoin before you buy: liquidity, bundles, dev wallet, holders, mint and freeze authority, and paid promotion.Reading the dev walletHow to find and read a Solana memecoin's dev wallet: what the creator holds, what they sold or moved, their creator rewards and every coin they launched before.Free Solana rug checkerFree Solana rug checker and token scanner. Paste a contract address for liquidity, bundles, dev wallet, holders, mint and freeze authority in plain English.