How to lock liquidity by sending the LP NFT to a burn address

Concept

In a V3 AMM, each liquidity position is represented by an NFT (one NFT = one LP position).

This NFT gives control rights over the liquidity position. Whoever owns that NFT can:

• adjust the position,

• withdraw liquidity,

• collect the accrued fees.

Should this V3 LP NFT be transferred to an address that nobody controls (a blackhole address), then nobody can operate that position anymore and the initial holder loses those control rights over the previously held liquidity position.

Of course, this would mean that the previous holder of that NFT will be unable to adjust their position, withdraw liquidity, and collect accrued fees in the future, effectively locking the liquidity in the pool forever.

⚠️ Important note: once it is sent to the blackhole, fees from that position can’t be collected either. They will stay in the pool.