Introducing Liquidity Bounties
Community-based market making programs
Blog » Solana liquidity mining campaign going live on May 26, 2020!
The Hummingbot and Solana teams have been preparing for the launch of a liquidity mining campaign, in which our communities will be able to participate in contributing liquidity for the SOL tokens and earn token rewards.
In this blog, we wanted to introduce the Solana project to our community and also introduce Hummingbot’s liquidity mining campaign to the Solana community.
Solana is a high-performance blockchain based out of San Francisco. The project was founded with the mission to support all high-growth and high-frequency blockchain applications, and to democratize the world’s financial systems. As of today, Solana can support up to 50,000 transactions per second, with 400ms block times and transaction fees estimated to be $0.00001 each. Which will continue to scale further as it’s network architecture was designed from the ground up to leverage improvements in hardware and bandwidth.
The Solana campaign will be starting on May 26, 2020 12.00am UTC and offer total rewards of USDC 7,500 over 12 weeks. The eligible token pairs will be SOL/BTC, SOL/BUSD, and SOL/BNB. For full terms of the campaign, please see liquidity mining campaign terms.
Hummingbot creates high-frequency, algorithmic trading bots and strategies for trading cryptocurrencies on both centralized and decentralized exchanges. As you can imagine, in our industry, speed defines success. But equally important is security; traders need to be able to trust the exchanges and platforms on which they trade. This is why we are really excited to be working with Solana because they have an innovative and promising approach for tackling the speed and throughput problem in blockchain.
In our sector, the DeFi space, we already have some DeFi applications starting to gain traction and this is just the beginning. But the speed limitation of current blockchain technologies really puts a ceiling on how far we can get. For example, without faster speeds, decentralized exchanges simply cannot compete with centralized exchanges, so there will always be this trade-off between security vs speed.
Overcoming these constraints will be the key to finally being able to apply the full security and decentralized benefits of blockchains to everyday uses. This can drive mainstream adoption of blockchain and really advance our industry, and we think that Solana can be one of the projects that can help us get there.
Liquidity mining is a decentralized and crowd-sourced approach for liquidity. It allows members of the Solana community (as well as anyone in the general market) to participate in market making for SOL token¹. By participating, users are not only supporting the tradability of the token and helping the project itself, but through liquidity mining, users will be able to earn token rewards based on their trading activity.
Liquidity mining gives token holders another way of generating yield on their holdings. We are really optimistic about this because we expect that liquidity mining will be able to deliver superior returns versus alternatives such as lending or staking, and of course, buy-and-hold². While ultimately the market and level of participation will determine how much reward each individual participant earns, the annualized returns for liquidity mining have the potential to exceed 10-20% and possibly even be multiples of that².
Liquidity mining also creates the opportunity for users interested in learning more about and try out bot trading; the rewards provide an additional incentive that contributes to overall portfolio return.
For more about liquidity mining, see below:
Even novice traders or non-technical users can simply download Hummingbot, which is free and easy to use market making software, configure trading parameters to begin market-making and earn liquidity mining rewards within a few minutes. Hummingbot is the first open-source, algorithmic trading bot that was designed to be easy enough to allow anyone to become a market maker or quant trader; no programming required.
Please review the Liquidity Mining Policy for the full disclaimer, including policies related to the use of Hummingbot.
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