What is defi's liquidity mining - Huashang group
Mobile mining is an important fuse for the popularity of defi. As early as a year ago, there were many defi related projects, but what really made defi hot was liquidity mining. Although the market has experienced a big dive in these two days, many liquid mining projects still have great benefits. Those who participated in liquidity mining in the early stage, were familiar with the rules and had sufficient funds, and most of them made a lot of money.
Although many people feel that this kind of mining and buying liquidity mining is difficult to continue, there seem to be endless takers in the market. Is there more money and more people stupid, or is there another reason?
The so-called liquidity mining means that in order to attract more funds to participate in the transaction of the project, the project party encourages everyone to provide liquidity in their own capital trading pool by issuing their own tokens. This is a bit similar. In order to encourage customers and sellers to trade in their own shopping malls, some newly opened shopping malls will issue them special discount coupons (or equity certificates). The main purpose of liquidity mining is to obtain users and traffic, effectively distribute their own tokens, and make the project have a broader community foundation.
Without considering the current bubble, the drainage and token distribution method of mobile mining has made good use of the characteristics of block chain centralization and is very innovative. Those farmers involved in mining have indeed provided liquidity and heat for the market.
But because the liquidity mining is too hot, the market has lost its rationality for a long time. At this time, a lot of projects (or swindlers) that had no defi foundation came out. They took advantage of the blindness of retail investors and set up a large number of worthless tokens to attract everyone to mine. Because most retail investors who received the offer are still in an irrational state, and many defi tokens have a small circulation, it is easy to control the offer and attract retail investors to receive the offer.
The current market is in an irrational state, so the current liquidity mining is digging risks, and it can continue because of the existence of the stupid people who leave no successor, and when the next ones are not, the bubble will burst.