Burned liquidity on Algorand, explained
When a token launches with a liquidity pool, whoever holds the pool's liquidity tokens can take the money back out. Burning those tokens takes that power away. Here is what that means and how to check it.
Liquidity tokens in one minute
When someone adds liquidity to a Tinyman pool, the pool gives back liquidity tokens (LP tokens) that represent their share. Whoever holds them can remove that share of the pool at any time. If a creator holds all of them, they can drain the pool: that is a rug pull.
How burning works on Algorand
LaunchLab sends the liquidity tokens to the ARC-54 burn contract, the Algorand standard for burning assets. It can receive assets but has no function that sends them out, so anything sent there can never be withdrawn.
On each launch, 80% of the liquidity tokens go there in the same transaction group that creates the pool. The other 20% is split 10% to the creator and 10% to the platform, and both are shown openly.
What burning does and does not guarantee
- It does mean the burned 80% of the pool can not be withdrawn by anyone.
- It does not mean the price can not fall. Burned liquidity protects the pool, not the value of the token.
- It does not cover the unburned 20%. The creator's and the platform's shares could be withdrawn, so the most that can ever leave is a fifth of the pool.
- It says nothing about the token's supply. That is protected separately: the token is created with no mint, freeze or clawback authority.
Verify a burn yourself
- Open the token's page on PNET LaunchLab. The safety checklist shows the burned percentage read from the chain.
- Follow the Burn transaction link to see the transfer of liquidity tokens to the ARC-54 contract.
- Compare the liquidity token's total supply on an Algorand explorer with the amount the burn contract holds.
Next
Read the FAQ for common questions, or launch a token with burned liquidity built in.
Launch a token See recent launches
Last updated 2026-10-25.