Now here, a Decentralized Finance ecosystem named ‘Defi’ is rocking the whole crypto world. The Defi market narrowly consists of a loan market comprised of interest and collateral and several derivatives and broadly refers to all trading products related to tokens. Liquidity is essential for the creation and growth of Defi markets.
Like how Mining revolutionized the early crypto world such as trade mining from Fcoin and PoW Mining, we saw that a marketplace-based approach could improve Market effectiveness and maximize incentives in the market for liquidity in crypto.
Rewards from providing liquidity…
In general, providing liquidity is a complex activity that has the risk of losing assets in catastrophic moves. Due to the risk of losing money, DEX (Decentralized Exchange) usually incentivizes users to add liquidity to pools by rewarding providers with trading fees or their *own tokens.
With each liquidity providing transaction, providers will automatically receive a liquidity provider (LP) tokens such as UNI-V2 on Uniswap and BAL on Balancer. These LP tokens can track your contribution to the pool and are used for distributing their share of the transaction fees accumulated in the period that you provide.
We aim to provide liquidity to centralized tokens through these Liquidity mining and further develop new Defi markets.
So, please stay tuned on CLT!