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24699187 No.24699187 [Reply] [Original]

I don't understand liquidity mining.
>pair Token X-ETH through Uniswap pooling
>it creates a certain amount of X-ETH LP tokens
>you stake those and receive rewards in token X
But what is the exact purpose?

>> No.24699250

>>24699187
You're providing liquidity so that Uniswap can execute trades. Uniswap collects fees when people trade the tokens that you provided liquidity for. Those fees get paid out to you and other liquidity providers.

>> No.24699272

exact purpose is to perpetuate scam vapourware so the same people can keep getting rich

>> No.24699284

>>24699187
Without it, whales would buy everything put up on uniswap and run through the orderbook instantly, driving the price way way up. With people providing liquidity, it adds to the orderbook on both sides so whales can't affect the price as much. You get paid "rewards" to incentivize you to keep crypto on the order books.

>> No.24699288

>>24699187
It tricks suckers into providing liquidity so devs and early whales can take your ETH in exchange for their worthless shitcoin.

>> No.24699325

>>24699250
>>24699284
So a project with a lot of its supply injected into liquidity pooling will be more stable and resilient to whales PND?
Some of the returns on LP pooping are quite insane, 50-200% APR

>> No.24699392

>>24699325
Yes. I don't really trust it myself because it looks too good to be true, but if you compare the returns to what a real stock market exchange gets paid, it can make sense. (Remember when every trade cost like $5? And there was like millions of trades a day on the NYSE if not billions? Fees can be extremely lucrative if you own the casino.)

>> No.24699412

>>24699392
Oh I get it, especially considering transaction fees through the ETH blockchain average $5 as well.
Thanks for the explanation I will be less dumb and clueless when I go to bed tonight.

>> No.24699474

>>24699412
Good luck anon. May you avoid every rugpull and hold the next moon mission.

>> No.24699592
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24699592

>>24699474
Same to you, may Sminem smile upon you and silence the Bogs.

>> No.24700182

>>24699288
This anon gets it

>> No.24700332

>>24699187
to create the illusion of depth to a totally fraudulent market
you are rewarded for enabling the behavior with tokens that you can ostensibly trade for something with real value (like eth))