Liquidity Mining

Definition

Liquidity mining is a mechanism where users provide liquidity to a protocol in exchange for token rewards. It's used by protocols to bootstrap liquidity and distribute governance tokens to users. It is a distribution mechanism for the governance token of a protocol.

Example

Risks to Consider

Common Questions

Related Terms

• Yield Farming

Related Articles

🧰 The DeFinancial Farming Toolbox

Howdy farmer, If you made it here, we will assume a shared basic understanding of what yield farming is. You might even have tried it by yourself, or heard the tales from a yield farmer: amazing! Today, it’s my turn to share key concepts & a curated list of tools to help you make the most out of it. If by any chance you landed here without any idea of what Ethereum or DeFi is, please click these links. This is not a guide, I keep it short & sweet with pointers only - Let’s get started!

💦 The Yield Farmer Tier List

DeFi is like a layered yield cake. When you first walk through the door, making a deposit on Aave and seeing your balance grow puts you in awe. Shortly thereafter, through your own research or discussions with the community, you realize there is more to it - there could be icing on the cake too! There are many ways you could find several streams of yields on a given capital utilizing Ethereum’s decentralized finance. Today, we’ll exclude out of the box any strategy involving leverage - the easiest way to achieve such a feat. There are still a lot of high-quality crops to plant, even without leverage!

Staying Ahead of the Curve: the shift from Liquidity Mining to Liquidity Shaping

It’s been four months since Maverick is out, and a few days since the MAV token joined the fray. Yet, most of DeFi is still scratching its head regarding how Maverick delivers 2-3x the capital efficiency of its top competitor, Uniswap. So the time was right for a deep dive into the innovations brought by the model and the new paradigm it fosters regarding liquidity management: liquidity shaping. Innovations on DEX? More like tools for LP to express themselves Fundamentally, a decentralized exchange can innovate at two levels: