Cryptocurrency is a relatively new concept. Good knowledge is required to do crypto transactions. This area is growing rapidly and becoming very popular. Simultaneously, hackers started adopting newer methods to wreak havoc and steal all currencies. But it is possible to provide safeguards for digital currencies to avoid huge losses. This article deals with that part about cryptocurrency that talks about protecting them from malicious attacks. The concept of liquidity pool lockers is also discussed in detail below.
We can define cryptocurrency as digital tokens that can be secured by cryptography. We can think of it as a digital asset. Cryptocurrencies have experienced a lot of backlash and controversy for multiple reasons. These reasons mainly include their use for illegal activities and their vulnerability to malicious attacks. At the same time, they were also praised for various reasons including their transparency, portability, etc. Bitcoin is the most popular form of cryptocurrency.
How to protect cryptocurrency?
As already mentioned, cryptocurrency is a new market. But that doesn’t make it any less vulnerable to hacking and theft. Hence, it becomes very necessary to protect digital currencies. There are various cases where people have been exposed to malicious attacks.
Such attacks lead to the loss of several cryptocurrencies. People who hack these accounts then tend to disappear into the internet and become impossible to trace. They also take many digital currencies.
One of the best ways to protect digital currencies is to use a wallet. Originally there were two types of wallets. New designs are also being introduced these days. Among all these options, physical wallet should be the best option. They are also called hardware wallets. They have a password that one needs to know to access the tokens. There is also a big downside to these hardware wallets. If the user loses or forgets the password, they can never access the tokens in any other way.
Apart from these, there are also paper wallets which are online wallets.
Users should always use strong passwords and should never share their secret keys.
Why should we use Liquidity Pool Locker?
Cryptex is a type of liquidity locker. A liquidity pool locker allows a user to store their tokens according to a smart contract. According to this contract, they cannot transfer the tokens from the start date to the end date specified in the contract. There are various such lockers and some of them are also very famous. Thanks to such restrictions, currencies remain robust and not vulnerable to malicious attacks. The user can also customize the duration and then store the LP tokens. These lockers do not capture the tokens, their function is to keep them safe for a certain period according to the smart contract.
Among all the techniques, the liquidity locker is very effective. It also has no risks compared to cold wallets.
If an individual (developer) does not own the LP tokens, they cannot claim the funds back from the pool at any time.