Liquidity Mining
Definition
A DeFi mechanism where users provide liquidity to a protocol's trading pools in exchange for rewards, typically paid in the protocol's native governance tokens, incentivizing deep liquidity.
Example
Liquidity miners deposit token pairs into Uniswap pools and earn trading fees plus UNI governance token rewards.
Related Terms
Frequently Asked Question
What is Liquidity Mining?
Liquidity mining rewards users who provide liquidity to DeFi protocols with governance tokens. It bootstraps protocol liquidity but creates sell pressure when miners dump reward tokens.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.