[Essentials for Beginners] Advantages of Gate.io Liquidity Mining Project and Reminders
Updated at:35 days 6 hours ago
Compared to a pure order book model, the AMM mechanism, while facilitating the trading process, provides more liquidity to new and non-mainstream cryptocurrencies with poor liquidity, reducing slippage in trading. Gate.io’s Liquidity Mining also embraces multiple advantages over decentralized platforms like Uniswap:
1. Security and Reliability
The Gate.io platform, which has always taken security as the core of its services, is more trustworthy than any other DeFi projects which are frequently attacked every other day. Gate.io has been ranked second in terms of security by a third-party security testing laboratory that has tested the security of 100 cryptocurrency exchanges around the world. Relying on a highly secure platform for liquidity mining investments, investors can effectively avoid project risks.
2. Convenience and Speed
When investing in liquidity mining in decentralized projects, investors often need to learn more about it and perform complicated settings and if something goes wrong in the operation process, there is the risk of not being able to retrieve funds from the contract address. With Gate.io Liquidity Mining, you can become a liquidity provider(LP) and earn gains in just a few simple steps. What’s more, the liquidity principal and yields can be withdrawn at any time.
3. High Revenue
In the new version of the liquidity pool, as rewards for LP, a fixed percentage (such as 50%) of the transaction fee will automatically be bought into GT through the open market and put into the AMM Reward Pool. That makes the Gate.io Liquidity Mining rewards higher than any other general platform.
4. Wide Range of Tokens Types
Since its inception, Gate.io has launched more than 1,000 trading pairs, making it the world's largest exchange for crypto coins. It was recently ranked #1 for Altcoins by Coin Clarity and was called an “Altcoin Hunter's Dream”. Gate.io offers a wider variety of coin pairs for users to pick and choose from based on their positions.
Liquidity providers should be aware of the impermanent loss of liquidity mining, which occurs when token price rises or falls, and the greater the price deviation, the greater the impermanent loss. If the coin’s market price doubles, the impermanent loss is only 7%. Considering the possibility of a doubling event, the amount of the impermanent loss is small relative to the revenue from liquidity mining, and it will disappear if the market price comes back to normal.