Liquidity mining is an investing tactic in which users of the DeFi protocol contribute their cryptocurrency holdings to make it simpler for other users to transact on a platform. The contributors receive a portion of the platform’s fees or freshly released tokens in return for their work.
Sending crypto from one wallet to another is comparable to the procedure. Typically, a pool comprises of a trading pair like ETH/USDT. One of the two assets might be contributed to the pool by an investor acting as a liquidity miner (or supplier). The (LPs) make it simpler for traders to enter and exit positions by putting their assets into the Defi platforms, with a portion of the trading expenses going toward rewarding them.