On Liquidity Lock and Rug Pulls.

  1. How do you mitigate rug pulls?

Is Liquidity Locked?

The answer as of now is no. But within a week of launch, it will be locked for a period of six months. Instead of burning the LP tokens, we decided to take the approach of utilizing a timelock contract to lock the LP tokens for a period of six months. The reason behind this is actually quite rudimentary — PrivacySwap was created as a way for us as CyberSec professionals to propagate privacy and security in the blockchain and DeFi space. This is important to us as we deal with CyberSec outside of blockchain and crypto and we know exactly why it is important to everyone regardless of how we use the Internet. As such, this project is funded by ourselves with our own hard earned money. We find it very painful to burn our money, never to see it again. As such, we had a choice between six months or a year of locking the LP tokens in a timelock smart contract and we felt that between six months and a year, six months is a very realistic timeframe to build PrivacySwap and have it standing on its own. So the conclusion we arrived at is that we will timelock our initial LP tokens for a period of six months, and after the six months are up, if we need to remove the liquidity for extra funds or for other reasons, that we will do so only in a careful manner so as not to cause too huge of a movement in price and/or liquidity.

How Do You Mitigate Rug Pulls?

As a base when building PrivacySwap, we did take a fork of PancakeSwap (which is a fork of SushiSwap). That being said, the one piece of code that was in SushiSwap’s MasterChef that was potentially dangerous was the Migrator function. This function allowed SushiSwap to autonomously migrate liquidity pools. In the days of SushiSwap, this function was absolutely necessary as they were a vampire protocol of Uniswap which required them to tap on Uniswap’s existing pools to build a base of users, after which migrating them over to SushiSwap’s own LPs. From then up until now, that piece of code still exists in SushiSwap’s MasterChef smart contract.

This is SushiSwap’s migrate function found in their MasterChef smart contract.
Here is PancakeSwap’s migrate function. Pretty much the same as SushiSwap’s.

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