What is Liquidity Mining? A very simple explanation

Imagine you have two coins: one in your pocket and one in your friend's wallet. You both decide to pool those coins together to lend money to other people, and in return, you get a small reward. That's basically liquidity mining in the crypto world.

But, instead of regular coins, you use cryptocurrencies like Bitcoin or Ethereum, and instead of lending them to your friends, you put them in a kind of "pool" on a DeFi (decentralized finance) platform. Here, other people can use those cryptocurrencies to make transactions or loans, and you earn rewards for lending them. It's that simple!

How does it work?

1. Deposit: First, you deposit two types of cryptocurrencies into a liquidity pool, like a vault where everyone can put their money.

2. Rewards: While your cryptocurrencies are there, you get paid a little extra (called APY) for helping keep the pool full of money.

3. Withdrawal: You can withdraw your cryptocurrencies at any time, along with the rewards you have earned.