Guide to Burning LP Tokens on Solana
Burning Solana Raydium Liquidity Pool Tokens
What is Burn LP On Solana ?
When create liquidity pools on Raydium, you receive LP tokens as proof of your deposit. Later, if you want to remove the liquidity, you return these LP tokens to Raydium, allowing you to withdraw your assets.
Burning liquidity (also referred to as burning LP tokens) means destroying the LP tokens so that no one can withdraw the liquidity. In simple terms:
Burning liquidity LP = Liquidity cannot be withdrawn
Burning liquidity LP ≠ Destroying the tokens in the pool
Why Burn LP Tokens?
1. Practical Reasons
For project teams, burning liquidity serves as proof to users that they won’t withdraw liquidity and run off. Without burning, project teams could potentially remove liquidity at any time, increasing the risk for users and discouraging participation.
2. Marketing Reasons
If liquidity isn’t burned, platforms like Ave.ai, GMGN, and Dexscreener will flag the project with warnings about risks. This can severely hinder project development and user confidence.
What Are the Impacts of Burning LP？
The only impact of burning liquidity is that the project team can no longer withdraw the liquidity. Other than that, there are no negative effects:
Tokens in the liquidity pool can still be traded normally.
The tokens and SOL in the pool remain intact and unaffected.
How to Burn LP On Solana?
If you’ve added liquidity via Raydium, you can use PandaTool’s liquidity management tool to perform the burning operation.
Connect your wallet via the button in the top-right corner.
Once connected, you’ll see the liquidity pools you’ve created.
Choose the burn percentage according to your needs. The tool currently supports the following options: 10%, 30%, 50%, and 100%.
Simply click on the desired percentage to proceed.
Additional Tools
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