LIQUIDITY MINING
ALGORAND PLATFORM PARTNERS WITH HUMMINGBOT TO UNLOCK GREAT BENEFITS
Algorand Blockchain platform, has recently made known to the users that it has adopted the Hummingbot liquidity mining platform to provide liquidity for its native token called ALGO.
Following the rapid surge in the emergence of different DeFi projects, which are all aimed at elevating the superior financial system called Decentralized Finance, liquidity is now becoming the other of the day.
This is because of its importance in driving a fully Decentralized Financial system as it facilitates seamlessness in the trade of the digital assets which has become the new tool of transaction, that will not only improve the financial transactions but also ensures borderless transactions.
Decentralized Finance has proven to have more positive impact in the global financial system as it helps eliminate the numerous challenges faced by users in Centralized Finance where the fiat currency was the means of payment.
For a clearer understanding, we will quickly look into Liquidity and some of its challenges..
LIQUIDITY MINING EXPLAINED
The concept of liquidity mining is very simple; a method of making the market to allow the efficient trading of digital assets without stress.
This is done by letting users who are regarded as liquidity providers to make the market, and in exchange for the liquidity they provide, the system rewards them with what is called the liquidity mining rewards.
So, summarily, liquidity mining provides trading liquidity for different digital assets and also gives unforseen reward to participants.
CHALLENGES FACED WITH LIQUIDITY MINING
Despite the benefits of liquidity mining to the trading of digital assets, different liquidity mining platforms still face challenges which limits them from delivering efficient liquidity mining services to users, which is ofcourse to the detriment of the project which needs their services and the Liquidity providers as well.
One of these challenges is the inefficiency in distributing liquidity mining rewards to the liquidity providers, as the majority of them lack the Blockchain which has the capability of achieving this.
This leads to the next problem, which is the discouragement of providing liquidity for different systems, in turn reflecting negatively on those projects, seeing as liquidity is very vital for trading.
Now that you have an insight on liquidity mining, let’s have a partnership between Algorand and one of the efficient liquidity mining systems called Hummingbot.
HUMMINGBOT LIQUIDITY MINING PLATFORM
Hummingbot system is a liquidity mining platform which carries out liquidity mining services to different projects who need them.
They do this by giving users the opportunity to become market makers by providing liquidity for their project of choice, and profit from the liquidity reward in return.
It strives to deliver great services to users, either as a project or a liquidity provider, by making the entire system transparent, fair and open to all.
Hummingbot platform is not without its own setbacks as well, as the issue of a reliable Blockchain to facilitate the efficient distribution of liquidity mining reward to the users is still a challenge, considering the fact that the regular Ethereum network has been failing.
Imagine what a partnership between Algorand Blockchain system and Hummingbot liquidity mining platform could mean.
ALGORAND ADOPTS HUMMINGBOT LIQUIDITY SYSTEM
Algorand Blockchain platform, has recently made known to the users that it has adopted the Hummingbot liquidity mining platform to provide liquidity for its native token called ALGO.
Having understood the vitality of liquidity in digital assets trading, and how well it will benefit its system during the trade of their Algo token, Algorand is making use of the efficient services provided by Hummingbot system, all to ensure that trading liquidity is made available in its system.
So, Hummingbot has launched a liquidity mining campaign for the Algo token, where liquidity providers are given the opportunity to earn the USDT and Algo token as reward.
WHAT THIS PARTNERSHIP MEANS FOR ALGORAND
Since market making is really important for the trade of the Algo token, with collaboration with Hummingbot to introduce liquidity mining into its system, allows the users and supporters of Algorand Blockchain system to provide liquidity for the Algo token, just to ensure that its trading is made seamless and efficient for every trader.
That’s not all…
While providing great support for this token, the Algorand users are also given the opportunity to earn rewards without stress.
This means that, while making the market for their favourite Algo token which is obviously to their benefit, they also get paid in return with liquidity mining rewards in a transparent and reliable way, through the use of their efficient Blockchain as well.
WHAT THIS PARTNERSHIP MEANS FOR HUMMINGBOT
One of the benefits which the Hummingbot system get to enjoy from partnering with Algorand Blockchain system is that its users get to earn great rewards for providing liquidity for the Algo token, as the project is not like the regular ones, rather it is well established and fully operational across the digital system.
Another benefit is the fact that the distribution of liquidity mining rewards on Hummingbot, to the participants will become easy, fair, and reliable.
This is because this partnership permit Hummingbot to adopt the reliable Blockchain of Algorand, which is being used in different industries across the world, following the fact that it is sophisticated and fully efficient.
The beginning of this adoption could be seen in the fact that instead of making of the Ethereum Blockchain to distribute USDT reward to liquidity miners of the Algo token token, Hummingbot system will be using Algorand Blockchain to see to it that USDT and other stablecoin is sent out as rewards, including the Algo token, which in no time will also stretch to other tokens.
Liquidity miners can now take part in liquidity mining operations without having to worry if the distribution of rewards will be fair or not and this eliminates completely the increased cost of sending out rewards as seen on the Ethereum Network.
SUMMARY
A close look at this, will indicate how efficient Algorand is in ensuring that its users get the best while trading the system’s native Algo token, as it has put a lot of things in place to guarantee the availability of trading liquidity.
Furthermore, by being adopted by Hummingbot in the distribution of liquidity mining rewards to every user on its system, shows clearly that it is superior to other Blockchains flooding the Blockchain industry.
