Locking liquidity makes the funds immovable until they are unlocked . This means that a certain percentage of the asset has been locked and can not be withdrawn by the developers which give investors a sense of security against their investments. Liquidity is locked using time-locked smart contracts.
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Lock-up periods are when investors cannot sell particular shares or securities . Lock-up periods are used to preserve liquidity and maintain market stability. Hedge fund managers use them to maintain portfolio stability and liquidity. Start-ups/IPO’s use them to retain cash and show market resilience.
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