Liquidity provider (LP) tokens represent a user’s share in a liquidity pool on platforms like Uniswap. They are minted when users deposit tokens into the pool and can be used to redeem a share of the pool’s assets or, depending on project design, burned as proof of a liquidity lock.
Key Takeaways
- LP tokens directly represent claims on underlying pooled assets.
- They can be independently tracked and verified on-chain.
How to Track LP Tokens and Ownership
Block explorers and analytics platforms let you track LP token distribution and verify when tokens have been transferred, locked, or burned.
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