D-Lock and the need for liquidity lockers.
As interest in crypto currencies grow, many people will eventually find themselves venturing away from big exchanges like Coinbase, Binance, Kucoin, etc. and into the DEFI (DEcentralized Finance). A lot of these people will be newcomers to the market, you, the reader might even be new to the market. So let’s talk about an idea known as “Liquidity Locking”.
Liquidity.
What exactly is it? What does it mean? Why should I care?
Well, it actually matters a LOT! Most people who have been in this space a while already know what locking is, but until you know, you might be extremely vulnerable to scams and bad actors, so let’s get into it here.
When a token is created it exists on the blockchain, but is not available for trading yet. In order to make it available to trade, it must be given liquidity. The liquidity is provided using the chains native currency, on ERC20 this is Ethereum (ETH), on Binance Smart Chain (BEP20) this is BNB, there are many other chains, but these are the main two that people have generally heard of.
The amount of ETH or BNB that you put into the liquidity pool WITH the supply of tokens dictates the price, consequently the market cap.
Great, so the token is now available to trade, what’s the problem?
Well, the Deployer of the token (the “dev”, or “developer”) almost always has full control of this liquidity pool, meaning, they can send all of the pooled tokens and liquidity to their own private wallet, essentially stealing it, this is known as a “rugpull” or “rug”.
This is where a liquidity locker comes in.
Liquidity lockers.
to combat this problem, liquidity lockers were invented. This is where control over the liquidity pool is handed over to a liquidity locking service, rendering it inaccessible to the developer for a set period of time. This usually incurs a fee to the developer to use the service, but is a must for building community trust and faith in the project.
There are many liquidity lockers on the market, some for specific chains, but most are multi chain.
However, there is still a glaring problem…
D-LOCK
This is where $DINGER (Schro-DINGER) teams D-lock comes in.
The problem with locking liquidity is that the way smart contracts (tokens, being the most familiar example) work, means that even when the liquidity is locked, you can still get scammed.
There are near limitless methods to achieve this, a developer can send themselves “team tokens”, which are free tokens that they send to a bunch of sleeper wallets owned by themselves. The tokens are free at this stage because it is before liquidity has been added, only the dev or team has access to this.
They can include a “mint function” in the contract, allowing themselves to mint tokens to simply outsell the entire market for that token, taking all of the liquidity in the process.
In fact, there are numerous ways this can happen.
D-LOCK exists to try to combat this problem.
By vetting developers who use the platform, blacklisting known scammers and monitoring liquidity actions, such as very large transfers out of the pool, the Schro-DINGER team is aiming to minimise this problem entirely, and to try to provide a safety net via a partial refund system for investors who got scammed.
This is extremely special and an industry first. We have to address the elephant in the room here, if you are getting into the DEFI space YOU ARE GOING TO GET SCAMMED at one point or another.
It’s a sad fact, and has become somewhat of a rite of passage, however it shouldn’t be this way, but it is. Thus you should always be careful with your investments and treat any purchase like you are going to lose it.
Does it really have to be this way though?
well, keep on reading and decide for yourself.
D-lock aims to filter out as many of the bad actors as possible via intensive data keeping on Deployers wallets, vetting developers where possible and disallowing tokens with certain contract features that are a setup for scammers to take advantage of.
This is an arms race with scammers however and some scams can and will unfortunately get through the net, where $DINGER D-Lock goes the extra mile is by including a refund system, which pulls assets from a central “insurance” fund to hopefully get you back SOME of your funds. It’s not going to be everything, but it’s a lot better than nothing and could be the difference between learning from a mistake, and being out of the market altogether.
There’s more though, $DINGER is launching an entire ecosystem around D-lock, which includes a Launchpad (Cat-apult), and Bridging services (moving tokens between chains). This kind of ecosystem tightens the net around scammers and opens up an entire new market to potential investors who would have been scammed out, or too afraid to enter the market.
Education is the key, but safety is first and foremost.
We will talk more about these other utilities in the future though.
Opportunities
So what does this mean for you? The investor?
well, it means that you might be a lot safer making investments in the future, ask your tokens team if they are locked with D-lock, and if not, then why not? Are they trying to hide something? Maybe not.
But if they locked with D-lock, you can be reasonably certain that they care about building trust with their communities.
It’s good for you, it’s good for the market and its good for the people.
You can invest right now though.
As you might have guessed already, Schro-Dinger has its own token, the purpose of this token was to raise money for development and marketing of this platform. It has an iron clad team behind it and they are committed to growing the token and its value over the long term. In the future, the tokens purpose will be moved to a utility token for using the D-lock.
what does that mean exactly?
Well, I saved the best for last.
You see, when a developer locks their liquidity pool with a locker, they must pay a fee, this can be anything, it could even just be the bare minimum gas fee (although this would be impractical and silly). However, it can be tokens.
As a developer interacts with the locker, putting their tokens and liquidity into the D-lock ecosystem, it incurs a usage fee, part of this fee is used to buy $DINGER and this amount of dinger is locked away with the tokens. This is the same as having buyers who never ever sell.
Over time, the value of $DINGER must go up, no matter how many times the price goes up and comes back down, those tokens are constantly being taken out of supply and locked away. Over a long enough period of time, it’s absolutely inevitable that the price of $DINGER will go up, it’s a mathematical certainty.
Now that’s what I’d call bullish…… cat-ish?
I’ll show myself out, thanks for reading, and if you want more information, head on over to;
https://www.Dingercat.io
https://t.me/dingertoken
https://www.twitter.com/dingertoken
https://www.instagram.com/schrodingertoken
https://www.reddit.com/r/schrodinger
https://discord.gg/u426hmda5T
