Osmosis Labs
  • Introduction
  • Basic Concepts
    • AMM
      • Token Weights
      • Pricing
      • Market Maker Functions
    • LP Tokens
    • Liquidity Mining
    • Impermanent Loss
    • Long-Term Liquidity
    • IBC
  • Liquidity Providing
    • Creating a Pool
    • Providing Liquidity
    • Bonding LP Tokens
    • Bonded Liquidity Gauges
    • Allocation Points
    • External Incentives
    • Fees
  • Staking
    • Staking OSMO
  • Governance
    • Voting
    • Creating a Proposal
  • Other Features
    • Liquidity Bootstrapping Pools
  • OSMO
    • Purpose
    • Token Distribution
    • Genesis Supply
    • Token Issuance
      • Liquidity Rewards
      • Staking Rewards
      • Developer Vesting
      • Community Pool
    • Airdrop Claim
  • Misc.
    • FAQ
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  1. Basic Concepts

Liquidity Mining

PreviousLP TokensNextImpermanent Loss

Last updated 3 years ago

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Liquidity mining (also called yield farming) is when users earn tokens for providing liquidity to a DeFi protocol. This mechanism is used to offset the impermanent loss experienced by LPs. Liquidity mining rewards create an additional incentive for LPs besides transaction fees. These rewards are particularly useful for nascent protocols. Liquidity mining helps to bootstrap initial liquidity, facilitating increased usage and more fees for LPs.

Information on Osmosis' incentive mining program can be found in this .

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