Description: Voluntary locking is a mechanism used in the realm of decentralized finance (DeFi) that allows investors to agree not to sell their tokens for a specific period. This agreement is established to foster stability and trust in a project, as limiting the circulation of tokens in the market aims to prevent extreme volatility that could negatively impact the asset’s value. Participants who choose voluntary locking often do so to demonstrate their commitment to the project and its long-term vision, which can attract other investors and contribute to the ecosystem’s robustness. This type of lock can vary in duration and conditions and is often implemented during the launch phases of new tokens or at critical moments for a protocol’s development. Overall, voluntary locking is a tool that helps align investors’ interests with the project’s goals, promoting a more stable and sustainable environment for the growth of cryptocurrencies and digital assets in the DeFi space.
