StakePoint
Solana DeFi Glossary
Definitions of key terms used in Solana DeFi, token locking, LP locking, and staking. Published by the StakePoint team.
LP Token
A token representing a share of a liquidity pool on a decentralised exchange.
Definition
An LP token (liquidity provider token) is a token issued to users who deposit assets into a liquidity pool on a decentralised exchange (DEX). LP tokens represent the depositor's proportional share of the pool.
When a user provides liquidity to a Raydium or Meteora pool, they receive LP tokens in return. These LP tokens can be redeemed at any time to withdraw the underlying assets plus any fees earned. The value of LP tokens fluctuates with the value of the underlying assets and trading fees accumulated.
LP tokens can be locked using an LP locker to prove that liquidity cannot be withdrawn from a trading pair for a set period — a common trust signal for Solana project launches.
StakePoint & LP Token
StakePoint accepts LP tokens from Raydium, Meteora, Orca, and PumpSwap for locking. When LP tokens are locked on StakePoint, they are held in Program Derived Addresses — the underlying liquidity cannot be withdrawn before the unlock date.
Related Pages
Frequently Asked Questions
What is an LP token?
An LP token represents a share of a liquidity pool on a DEX like Raydium or Meteora. It can be redeemed for the underlying assets plus accumulated trading fees.
Why would I lock LP tokens?
Locking LP tokens proves that the liquidity backing a token cannot be removed before the unlock date, reducing liquidity removal risk for investors.
Related Terms
LP Locker
A smart contract that locks liquidity pool tokens on-chain until a set unlock date.
Liquidity Locking
The process of locking LP tokens on-chain to prove liquidity cannot be withdrawn early.
Raydium
The largest decentralised exchange and AMM on Solana.
Meteora
A Solana DEX and liquidity protocol known for dynamic liquidity pools.
Program Derived Address (PDA)
An on-chain Solana account controlled by a smart contract with no private key.