Solana Glossary
What Are LP Tokens?
LP tokens represent your share of a liquidity pool. Learn about LP tokens, burning them to lock liquidity, and Burn & Earn.
LP (Liquidity Provider) tokens represent your share of a liquidity pool. When you deposit tokens and SOL into a pool on Raydium, you receive LP tokens proportional to your contribution.
What LP Tokens Do
- Exchange LP tokens back for your deposited tokens + SOL
- Show your share of the pool
- LP token holders earn a share of trading fees
- Burn LP tokens to permanently lock liquidity
Burning LP Tokens
Burning LP tokens permanently destroys them, making the underlying liquidity irremovable. This is the strongest trust signal for any token project. SolTokenCreator.io's Burn & Earn feature lets you burn LP while continuing to earn trading fees.