Liquidity Mining

What is Liquidity Mining? In a broad sense, liquidity mining refers to the fact that a defi user interacts with a protocol and then gets the native token of the protocol as a reward. The decentralized protocol based on BTC can use proof of work (POW) for miners to maintain network security. In order to decentralize the project based on Ethereum, it is necessary to transfer the governance to the users of the protocol in the form of token, so as to effectively turn users into stakeholders.Comp (autonomous loan / loan agreement) is the pioneer of this form. It was later derived that allocating comp pro rata to users of the protocol, and adding and / or borrowing assets to compound can generate high interest rates and additional comp. Therefore, the practice of using the protocol to earn local platform tokens is called liquidity mining.