Table of Contents
Choosing the right market is the key to liquidity mining success. Here are some tips for selecting markets:
To learn more: https://youtu.be/AU7h7tQpbaM?list=PLDwlNkL_4MMekihXq7C-Nzx9YkivaZZ6r https://hummingbot.io/en/blog/2021-02-sharing/
The Factor Score is a score created by Hummingbot to convey the risk faced by liquidity providers for a given token. It is important for miners to understand the risk involved in different pairs, not only the yields provided, before selecting them for market making.
The score is calculated based on publicly verifiable data points such as market capitalization rank and number of days since first publicly listed. To learn more:
https://support.hummingbot.io/hc/en-us/articles/4412298958617
You can use the volatility risk factor to select markets in Core, or Growth to start your market making strategies. Those markets are relatively more liquid.
https://hummingbot.io/en/blog/2021-03-identifying-trends/
In-depth tips on how you can identify crypto trends using:
You can also run custom scripts on Hummingbot using these indicators.
Inventory risk is the risk of holding the assets that you market make on, which may fluctuate in value. It is one of the biggest risks market makers hold.
https://hummingbot.io/en/blog/2020-10-inventory-risk/
This article explains the concepts of inventory risk and shows us how we can lower inventory risk using inventory skew, filled order delay, hanging orders, and ping pong.
https://hummingbot.io/en/blog/2020-06-what-is-market-making-guest-post/
Explains mainly how spreads are related to inventory risk.
DISCLAIMER: The websites located at https://hummingbot.io, https://docs.hummingbot.io, https://miners.hummingbot.io (collectively, the "Site") are copyrighted works belonging to CoinAlpha, Inc. ("Company", "us", "our", and "we"). Certain features of the Site may be subject to additional guidelines, terms, or rules, which will be posted on the Site in connection with such features. All such additional terms, guidelines, and rules are incorporated by reference into these Terms. These terms of use (these "Terms") set forth the legally binding terms and conditions that govern your use of the Site. By accessing or using the Site, you are accepting these Terms (on behalf of yourself or the entity that you represent), and you represent and warrant that you have the right, authority, and capacity to enter into these terms (on behalf of yourself or the entity that you represent). You may not access or use the Site or accept the terms if you are not at least 18 years old. If you do not agree with all of the provisions of these terms, do not access and/or use the Site.