Define “Liquidity Mining” in DeFi.
Liquidity Mining is the process of distributing a protocol's native governance token to users who provide liquidity to its platform (e.g. depositing assets into an AMM pool). It is a form of yield farming where users earn both trading fees and newly minted tokens as a reward for bootstrapping the protocol's liquidity and utility.
Glossar
Yield Farming
Strategy ⎊ Yield Farming describes the practice of actively moving crypto assets between various decentralized finance protocols to maximize returns, often involving complex stacking of lending, borrowing, and liquidity provision activities.
Trading Fees
Cost ⎊ Trading fees represent a quantifiable deduction from capital employed in executing strategies across cryptocurrency, options, and derivative markets, directly impacting net profitability and risk-adjusted returns.