What are liquidity pools and how can it be used to give value to your cryptocurrency? What is a Rug pull in cryptocurrencies? How to set up market capital for your token? Why and how to lock liquidity? All questions have been answered in this video itself by Ali Solanki.
Liquidity pools are created to set value for your cryptocurrency. They always have 2 cryptocurrencies in the pool. If you want to give value to your cryptocurrency, you need to be the first liquidity provider for the token. Once you do that, you can create your own liquidity pool with one of the cryptocurrencies set to your token address and the other a popular cryptocurrency like BNB, ETH and so on. These liquidity pools can be set up on Pancakeswap, Uniswap and so on.
Once the liquidity pool is set up, you can then have buyers swap their existing cryptocurrencies to your token driving the price of your token up.
Rug pull: Rug pull is basically removal of the entire liquidity by the liquidity provider and thereby making the token worthless. It an ethically and morally a wrong practice to perform and is illegal in many of the countries as well.
So stay safe, stay educated and don't fall into such crypto scams and only invest in things you understand and trust.
Index: 00:00 Introduction 01:31 Using liquidity pool to give value to your token 02:45 Trading in your cryptocurrency 04:52 How does the price of cryptocurrency change? 06:55 Rug pull
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