Token Locks, Liquidity Locks and Vesting

Token Locks, Liquidity Locks and Vesting

Nowadays everyone can create a token and launch it on a decentralized exchange such as Uniswap. Such tokens are often risky because of rug-pulls (creators withdrawing their tokens from DEXs), poor contract code, exit scams (projects running away with the ILO/ICO/IDO raise) and mass token dumps by external investors due to unfavorable or non-existing vesting schedules.

At TrustSwap, we want to create a solution that is able to tackle these fundamental issues in the crypto space. We are looking to create a safe path for all stakeholders involved in the crypto ecosystem, including investors staking assets and creators launching tokens. These participants need to operate witin an ecosystem with a minimal risk of scams, hacks, token dumps and coding errors.

We name this solution the SmartLaunch.

SmartLaunch is a security ecosystem which is provided for free to the community and consists of 4 key services:

  1. Token Locks
  2. Liquidity Locks
  3. Vesting-as-a-Service
  4. Mint

This blog article focuses on the fundamentals of the first 3 services outlined above as well as their integration with Mint, which enables blockchain projects to achieve an affordable and easy way to eliminate their operational risk.

The 3 locking services are implemented based on TrustSwap's proprietary time-locked smart contract, designed to set customized token lock parameters.

TrustSwap now enables projects to increase trust within their community and investors by time-locking their team tokens, liquidity and raised amount. All details of locked tokens are accessible on our transparent, publicly available dashboard (is the project you are planning to invest in there?).

All services enable support with multiple blockchains including Ethereum, Avalanche and Binance Smart Chain. Support for additional chains is on the roadmap.

Token Locks

Token Locks allow project team members such as founders and token developers to set up token lock parameters.

Projects can lock a percentage of their pre-mined token supply or team owned tokens into our time-locked decentralized smart contract vault.

Tokens can not be accessed by the projects until the end of the locked period(s). This way the community and investors can be reassured that tokens will not be mass dumped by the team during the contract period, causing a so-called Exit Scam.

This is a huge innovation compared to the majority of token offerings, where projects may avoid fulfilling their promises and maliciously sell off all their tokens, leaving holders, stakers and investors with a close to $0 token price.

How can I create my project's Token Locks?

Navigate to https://team.finance/lockups and follow this simple procedure in the wizard:

  1. Under "Create New Lock", select the appropriate chain
  2. In step 2 select: “Project Tokens” and follow the steps

Make sure you are connected with a compatible wallet such as Metamask to complete the required steps. The token lock parameters are set via smart contracts technology and are accessible for everyone to evaluate by clicking "View" next to the token of your preference in the https://team.finance/ dashboard.

Liquidity Locks

Liquidity Locks is enhancing a similar security attribute for token holders. First, let’s understand how liquidity pools work.

Projects raise capital and use a percentage to supply the Decentralized exchange (DEX) pool with liquidity in one or more token pairs. In return, the DEX provides for each token pair a Liquidity Pool token that represents shares in that pool. Those tokens are also used to remove the liquidity from the DEX.

Via the Liquidity Locks wizard, projects can lock these liquidity tokens by sending them into a time-released vault that will only return the Liquidity Pool tokens at the configured date.

During the lock period, the project cannot pull the liquidity from the exchange and dump those tokens on the holders causing the token price to drop near $0.

The vesting schedule is published with a transparent view of release dates and amounts to investors, as a proof of trust and security.

How can I lock my Liquidity tokens?

Liquidity Locks can be created after the project supplies the liquidity of the pair(s) to the DEX. Projects access https://team.finance/lockups and follow this simple procedure:

  1. Under “Create New Lock”, select  the appropriate chain
  2. In step 2 select: “Liquidity Tokens” and follow the steps

Currently, liquidity for projects which are built on Ethereum, Binance Chain and Avalanche can be locked.

Make sure you are connected with a compatible wallet such as Metamask to complete the required steps.

Vesting-as-a Service

Projects can create their own hourly token vesting contract for external recipients via our audited smart contract platform with flexible vesting periods and amounts. This will assist in preventing mass token dumps by investors, airdrop and ICO/ILO/IDO participants and/or other vested external parties.

This is done by continuously releasing small amounts of tokens into an hourly claiming dashboard.

Therefore, vested tokens holders will individually decide with which intervals to (partially) claim their tokens. Creating a more balanced and spread division of token releases reduces sell pressure, mass dumping and volatility.

How can I create my vesting schedule?

Project members can go to: https://team.finance/vesting and:

  1. Select to deploy a new contract or apply an existing one
  2. Follow the steps to create an hourly vesting schedule

Make sure you are connected with a compatible wallet such as Metamask to complete the required steps.

How can these services be combined with the complementary SmartLaunch service - the MINT Token Generator?

Projects launched via the TrustSwap Launchpad embed Token Locks, Liquidity Locks and Vesting-as-a-Service in order to guarantee high quality and attract investors who look to invest in secure and competitive projects.

Additional trust and confidence can be obtained by combining these services with MINT. MINT is the service that allows anyone to easily mint within minutes and without coding experience required, an audited and customizable token on Ethereum, Polygon and/or Binance Smart Chain. With MINT, projects can significantly decrease development and audit costs, and remove code-based risks such as secret minting features, backdoors, code vulnerabilities, attack vectors and bad actor developers.

Projects can efficiently mint their own audited token and add common features such as minting, burning, staking and more. The projects save significant costs for 3rd party audits and code development, while they also generate trust from the community knowing that the scam and attack risk is exponentially declining.

The integration of these 4 services offers a secure and safe environment to investors, community, holders, stakers and team members by preventing team token dumps, rug pulls and rogue and risky minting. Claim schedules can be connected to concrete achievements and dates, in a trustless and transparent environment.

Follow the TrustSwap Blog for more insights on TrustSwap's decentralized services.