How to participate in liquidity mining?

For experienced investors, liquidity mining is a term that is often seen, but it is very unfamiliar to novice investors. Liquidity mining is developed based on the principle of “AMM (Automatic Market Maker)” Liquidity mining products are composed of different liquidity pools. There are two types of virtual currency or legal currency in each liquidity pool. Users can add liquidity to the liquidity pool and become a liquidity provider to obtain service fee profits and Its current profit. So, how to participate in liquidity mining? What are the liquidity mining projects? Below, let’s take a look.


How to participate in liquidity mining?

1. Prepare a decentralized wallet

How to participate in liquidity mining?

The decentralized wallet is your toolbox, here are most of the tools that can satisfy your experience of DeFi (DeFi applications for transfer, trading, mining).

2. Purchase Gas

Playing DeFi on Ethereum requires Gas (oil) even for the simplest actions, and the more people use it, the more expensive Gas (oil) will be. Gas is determined by supply and demand. Generally speaking, gas in the morning of Beijing time will be the most cost-effective. Generally, each wallet will make an estimate, indicating the cost according to low, medium and high. It is best to use the “medium” gas cost. If your transaction fee is very low and the transaction has not been confirmed for a long time, you can see an acceleration button in the red box. After increasing the Gas fee, the transaction will be confirmed faster.

3. Exchange for cheap stablecoins

Cheap exchange for stable coins is especially useful in DeFi mining. In the popular project Compound, USDT had the largest profit at the beginning, and then DAI and USDC had the largest profit. Lower exchange costs have higher profits. Simply calculate that the transaction fee of a centralized exchange is two thousandths of the handling fee. If you save half of the exchange cost, it is equivalent to earning one thousandth (annual It takes 5% of the wealth management products to deposit for 7 days to earn interest), not to mention that there is generally no stable currency exchange depth of hundreds of thousands of dollars in centralized exchanges, and a large exchange will lose slippage except for transaction fees.

The most commonly used stablecoin exchange methods today are: Curve, Balancer, mStable and its dForceSwap, and you can also try aggregation transactions such as 1inch.

4. In exchange for WETH and its WBTC

On Balancer, the two can be matched as a buying and selling pair to provide liquidity to obtain the profit of mining Bal. WETH is required in many DeFi applications. Users can go to Oasis to exchange, or choose WBTC, or change BTC to USDT, and then transfer USDT to DEX to buy WBTC.

5. Sell the coins in DeFi mining

Users can go to centralized exchanges to sell, such as MXC/Huobi/Huofu/Hotbit, etc. Recently, exchanges are frantically buying DeFi, and basically all projects will be released. The second method is to use Uniswap to sell quickly in the decentralized wallet, and then continue to provide mining for the sold coins.


What are the liquidity mining projects?

1. UNI

The market value of UNI is 13.467 billion U.S. dollars, the total circulation is 521 million U.S. dollars, and the 24-hour turnover is 1.147 billion U.S. dollars.

Uniswap is suitable for any ordinary user to issue ERC20 currency on Uniswap and establish a corresponding fund pool. When a certain ERC20 currency fund pool (ETH and ERC20 transaction pool or ERC20 and ERC20 transaction pool) is established, the platform encourages multiple participants to share in the same Exchange for buying and selling transactions in the asset pool, and give the first liquidity provider who provides liquidity to this contract the power to set the exchange rate between this ERC20 currency and ETH (or ERC20 currency), and to the liquidity provider Give all transaction fees (0.3% of volume). When the fee rate in the fund pool is inconsistent with the larger market, there is room for arbitrage. At this time, arbitrage traders can smooth out these price differences by moving bricks to keep it at the same rate as the broader market. Afterwards, all liquidity providers will use their recharge rates as the basis for calculating equivalence.


The market value of AAVE is 4.547 billion US dollars, the total circulation is 12.4368 million, and the 24-hour turnover is 730 million US dollars.

According to the improvement proposal (AIP1), Aave will convert the Aave platform currency LEND to AAVE at a ratio of 100:1 on October 3, 2020 (block height 10978863). Aave is an open source decentralized lending protocol that provides users with savings and borrowing services.


The market value of CAKE is 2.23 billion US dollars, the total circulation is 120 million US dollars, and the 24-hour turnover is 354 million US dollars.

PancakeSwap uses an Automated Market Maker (“AMM”) system that enables swaps on the Binance Smart Chain. It’s fast, low-cost, and allows anyone to participate. The purpose of PancakeSwap is to become the first liquidity provider on the Binance Smart Chain and the birthplace of an innovative gamified farming system, and promote its integration into other chains and other industries.


COMP has a market value of US$1.816 billion, a total circulation of 4.6715 million, and a 24-hour turnover of US$193 million.

Compound is a DeFi protocol based on Ethereum. The key business is similar to bank “mortgage lending”. Users can mortgage their assets in the agreement to obtain an annual rate of return, and the asset lender needs to pay the corresponding interest. Project introduction Compound requires an algorithm on the Ethereum blockchain, an independent interest rate agreement. Compound has grown into one of the foundations of the DeFi industry. As of June 25, 2020, Compound is the world’s largest DeFi protocol, having locked over $500 million worth of encrypted assets and bringing in over $900 million worth of encrypted assets.

5. SNX

The market value of SNX is 1.548 billion US dollars, the total circulation is 36635, and the 24-hour turnover is 1.153 billion US dollars.

Synthetix (formerly: Havven) is designed for engineers to build decentralized and trustless networks. The Synthetix Network Token (SNX) currency is applicable to a variety of comprehensive assets, including: legal tender linked to the US dollar, precious metals, indices and even other digital currencies. The predecessor of the project, Synthetix, was formerly known as Havven, which was founded in 2017 and consists of a distributed payment network and a stable currency.

6. YFI

The market value of YFI is 1.548 billion US dollars, the total circulation is 36635, and the 24-hour turnover is 1.153 billion US dollars.

The goal of is simple – it is an aggregation platform that serves the lending platform according to the profit output data of different products, and it obtains the highest profit output in the contract trading interaction by rebalancing the data.


Speaking of this, I believe everyone has a certain understanding of how to participate in liquidity mining and liquidity mining projects. In general, as long as the project is popular in the currency circle, there will be more and more corresponding projects, and there are good and bad in these projects, and some are even a huge pit in itself, so the editor also reminds here Dear investors, if you are just entering this industry, you should start from the simple, don’t worry too much, don’t be in a hurry, this industry has just started, the most important thing is to keep the principal.

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