Liquidity mining is an interesting mechanism that allows you to earn crypto while helping the market. It involves providing your crypto assets to liquidity pools in exchange for some rewards. Many platforms offer such mining options, and ByBit is among the most popular services with these functions. It offers favorable conditions and a wide choice of available tokens you can mine. In this article, we give you a brief explanation of how liquidity mining works on ByBit and what you can do to start earning this way.
ByBit is a well-known crypto exchange mostly favored by experienced traders specializing in trading a special kind of financial instruments: crypto derivatives. They are attracted by a wide choice of assets and high leverage rates, but ByBit has many additional earning options suitable even for beginners. It has a well-known affiliate program that allows you to earn rewards for attracting new users, but we’re going to talk about its liquidity mining options.
About liquidity mining
Basically, liquidity mining is a process in which crypto holders provide liquidity to exchanges in return for some reward. This way, end-users have enough crypto in circulation to trade, and they pay for the opportunity from their own pockets: trading fees are the most common source of rewards for liquidity miners. Basically, the ByBit liquidity mining system also uses this mechanism to help you earn some crypto passively. In order to participate, you must purchase special LMB tokens.
Mining liquidity with ByBit
While the mechanism may seem pretty complex, using it is very simple. First of all, find a liquidity pool you wish to use in the All Pools section. Then, add some liquidity by clicking the Add button. You’ll be asked how much you want to add: select your desired amount of tokens and submit your order. Click the Confirm button to finish the process. ByBit allows you to use leverage for liquidity mining, and that means you can earn even more.
The exchange offers stable yields in the long term, but you should be ready to suffer temporary losses if the price of an underlying asset suddenly changes. The rewards are not guaranteed, so you have to choose tokens wisely. However, ByBit is known to operate one of the most powerful pools in the world that can help you mine the most profitable tokens. Removing liquidity is also easy, so you can take the tokens you’ve placed any time you want.