Liquidity mining is a term used in DeFi applications where users supply liquidity to decentralized financial applications and receive rewards for doing so. In the context of Uniswap, liquidity mining refers to users (Liquidity Providers, or LPs) supplying both assets to a given trading pair market so that the protocol can execute trades.
In the context of 88mph, there are multiple incentives for users to provide liquidity to the pools that MPH is a part of throughout the Ethereum ecosystem. There are pools for MPH currently on Uniswap, Sushiswap, and Bancor Network.
Whenever liquidity is deposited into a pool, special tokens known as liquidity tokens (e.g. Uniswap's UNI-LP or Sushiswap's SLP) are minted to the Liquidity Provider’s address, in proportion to how much liquidity they contributed to the pool. These tokens are a representation of a Liquidity Provider’s contribution to a pool. Whenever a trade occurs, the 0.3% fee is levied and is distributed pro-rata to all Liquidity Providers in the pool at the moment of the trade.
If the liquidity providers stake their liquidity tokens in the dedicated pools listed on 88mph, they will receive additional rewards in MPH tokens. This incentive is designed to compensate them for the liquidity provision and the inherent risk associated with such an endeavor.
The currently available options for providing MPH liquidity and earn rewards are: