The crypto industry has pioneered several innovative ways to generate passive income, and liquidity mining is just one example. One of the most popular trends and an integral component of the DeFi space – liquidity mining – is the process of providing liquidity to decentralized exchanges (DEXs) via cryptocurrencies.
Liquidity mining, also known as yield farming, primarily attempts to lend liquidity to a protocol’s liquidity pool and obtain an income afterward while also assisting in developing active community members and a significant user base for the project. Typically, providers are either token holders or users of the protocol after it has launched, and they are compensated in the protocol’s native tokens in exchange for their cooperation.
In addition to the rewards represented by a project’s native token, liquidity miners may also earn the governance rights that it represents. Anyone from anywhere in the globe may now make passive income through liquidity mining by using a specific platform to lend out their cryptocurrency.
Owing to the advent of decentralized exchanges fueled by the growth of DeFi, DEX’s are constantly on the hunt for new users who can contribute funds to the platform. Most decentralized exchanges are now replacing their order books with automated market makers (AMM), which give better control over trading processes. AMMs are essentially autonomous trading mechanisms that do away with the need for centralized exchanges and other market-making processes.
Not only are AMMs the underlying protocol that drives all decentralized exchanges, but they also allow digital assets to be exchanged in a permissionless and automated manner. Within a specific liquidity pool, AMMs issue crypto tokens whose values are determined by a fixed mathematical formula. AMMs also allow you to swap one token for another. Typically, when a user wishes to execute a trade, they are required to pay a fee. This fee is then collected by the AMM and distributed as compensation to each liquidity provider.
Without a doubt, liquidity mining provides substantial benefits for both investors and exchanges, ranging from improved overall liquidity to the promotion of efficient price discovery, larger and equitable distribution of native tokens, fewer barriers to entry, a successful marketing strategy, and more.
Delta Exchange, one of the world’s leading crypto derivatives exchanges, has rolled out several unique features that allow investors to get more out of their cryptocurrencies. And the liquidity mining program with Robo Trading strategies and Yield Trading strategies are a few of them. These strategies on Delta will enable users to deploy their capital into automated crypto trading strategies and earn a potential return over time with the help of crypto trading bots. Users can also invest in any of these strategies and mine DETO, Delta Exchange’s utility token.
The various Robo Trading and Yield Farming strategies available on Delta Exchange are as follows:
ROBO TRADING STRATEGIES
This strategy trades in the top 2 cryptocurrencies based on market capitalization – Bitcoin and Ethereum.
The Top 20 Momentum strategy trades in the top 20 cryptos on the basis of their market capitalization.
This Momentum strategy trades in the top DeFi assets based on market capitalization.
This strategy only trades in BTC inverse perpetuals.
The ALTBTC Momentum strategy only trades in top altcoin pairs.
This Automated Market Maker (AMM) strategy aims to make profits by providing liquidity on the books of cryptos with large capitalization – BTCUSDT and ETHUSDT.
This AMM strategy provides bids and offers on BTCUSD inverse contracts.
This strategy captures the premium in BTC and ETH futures over the spot market price of Bitcoin and Ethereum.
A newly rolled out strategy under Robo Trading, this strategy sells weekly 20 Delta put and call options while simultaneously buying ATM options.
Click here to learn more about Robo Trading strategies.
YIELD FARMING STRATEGIES
By selling BTC upside beyond the strike price on the expiration date, this strategy aims to generate a higher yield on BTC holdings.
The Enhanced Yield ETH strategy generates ETH yield by writing monthly call options.
The Enhanced Yield USDT strategy generates stablecoin yield – in USDT – by writing monthly put options.
To learn more about the Yield Farming Strategies, click here.
Looking to get started with liquidity mining programs on Delta Exchange? Head to the Delta website to get started.
None of the information on this website is investment or financial advice and does not necessarily reflect the views of CryptoMode or the author. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website by its authors or clients. Always conduct your research before making financial commitments, especially with third-party reviews, presales, and other opportunities.
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