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Initial Liquidity Burned
Another form of rug pull is to remove the initial liquidity. What does this mean?
I.e. you can create the Hypothetical Token (HYPO). Mine 50k HYPO and create an LP with 10 BNB. You promote the project, people start buying, exchange their BNB for HYPO. Now your LP has more BNB and you can disarm the LP, receiving what it has now. Which are the BNBs of all the people who bought and the HYPOs that did not sell. And those who bought have HYPOs that are worth nothing and that they cannot sell because there is no longer an LP.
This is avoided in two ways, and we have chosen to do both.
- LP tokens burned. We will only mine an initial amount of COSMIC to build the LP so that you can start buying. We will immediately send these LP tokens to the dead wallet. By not having them we will no longer be able to disarm the LP.
- That there is more than one person with LP tokens. Our farming incentivizes users to build LP with COSMIC-BNB and COSMIC-BUSD. So even if we somehow disarm our LP, there would still be others.
This second form still allows a partial rug pull, but combined with the first it makes rug pull impossible by this method.
You should not buy any tokens until the initial LP tokens are burned.
Last modified 2yr ago