If you’re reading this, you’re probably already aware of the numerous advantages of cryptocurrencies and digital assets when compared to their fiat equivalents. From enabling global money transfers in the blink of an eye to eliminating costly banking services, crypto, and digital assets quite clearly represent our future as a collective means of exchange.
However, the potential of digital assets to have this revolutionary impact on our daily financial lives has been treated with some skepticism from the broader public and traditional financial institutions. Not going to happen, they say; crypto assets are simply too volatile to be reliable as a means of exchange for goods and services. And, until now, they may have had a point.
Beneath the surface, however, there are a number of good reasons for the historical volatility exhibited by certain cryptocurrencies. And among those reasons, lack of liquidity stands out as one of the primary factors.
Liquidity — High and Low
A quick refresher on liquidity for those who are unfamiliar with the concept. The term “liquidity” refers to the extent to which a market permits assets to be bought and sold at stable prices. As a general rule, if a market is said to have “lower liquidity”, then it can be expected to be more volatile (especially when large orders are placed), with frequent and drastic price changes for assets. On the contrary, if a market boasts higher liquidity or is said to be “more liquid” then it is less volatile overall, with asset prices more stable as a result.
Lack of liquidity has been an ongoing problem in the crypto markets — and has acted as a primary contributor to price volatility and the inefficiency of accumulation and liquidation of tokens. Recently, though, exchanges and projects have circumvented the issue of lack of liquidity through a novel process known as “liquidity mining”. Put simply, liquidity mining is a network participation strategy in which a user provides additional capital to the market in return for liquidity provisioning fees and other rewards. By boosting liquidity, liquidity mining ensures that digital assets can be traded at a stable price. As a further bonus, liquidity mining also allows the general public to participate in the market making — contributing to providing liquidity to the markets — for the first time.
AllianceBlock Liquidity Mining
Today, we are pleased to announce the launch of AllianceBlock’s very own liquidity mining product that will be released on the 7th of November. The AllianceBlock Liquidity Mining product allows users to provide liquidity through a number of different protocols, starting with Uniswap, and stake their liquidity pool tokens for a reward in ALBT and later a potential additional reward from our strategic partners.
Fully audited by leading cybersecurity solution-provider, CertiK, the leading provider of end-to-end cybersecurity solutions, the solution integrates completely with Metamask, enabling participants to quickly and easily accrue rewards (Check out the CertiK report here — note that all issues mentioned in the report are solved, even the informational ones) .What’s more, all features from managing liquidity to managing rewards (claiming and withdrawing) will be presented to the users in a user-friendly UI. Following the launch of the product, a full description of the user journey, how the product will work and how it will be released will be made available.
“We are excited to be the official security provider for the world’s first regulated infrastructure provider for decentralized capital markets. Security is a top priority for AllianceBlock who is always in accordance with modern industry standards and CertiK security recommendations.” — Yvan Nasr, Global Head of Professional Services, CertiK.
- 75,000 ALBT will be released weekly to every pool over the coming month (amounting to 900,000 ALBT).
- Initial Liquidity Mining pools are as follows: ALBT/ETH and ALBT/USDT on Uniswap (and later also ALBT/ETH/USDC on Balancer)
- The release schedule for the next month will be released in 3 weeks and every month after that
- The liquidity mining program will run for 6–9 months, depending on the cryptocurrency market sentiments and needs.
- Rewards will be decreased gradually every month
- In our next product release that will take place very soon, users will be able to stake their reward and hence earn more reward or inject it back to the liquidity pool to benefit from compounded APY
Our liquidity mining partnership program will allow us to support multiple asset pool rewards on Balancer and we’ll be integrating with additional DEX protocols too. More info about the liquidity mining partnership program will be released soon.
We’re very excited to launch this and for our community to get involved and experience liquidity mining as they never have before. Over time, we’re focused on continuing to develop this solution to create the next generation of liquidity mining that will truly shake up the space, so stay tuned!
CertiK is an edge-standards cybersecurity firm founded by Computer Science professors hailing from Yale and Columbia University respectively, aiming to improve the security and correctness of smart contracts and blockchain protocols on a global scale.
Leveraging a seasoned team of multi-skilled engineers and security auditors, CertiK’s mission is to apply a plethora of high-level industry practices, covering the entire spectrum of static, manual, and dynamic analyses, in order to ensure each project subject to a formal audit is up-to-date with modern security standards while offering their services to the broader DLT community.
Over the past few years, CertiK has serviced more than 100 top-shelf blockchains, DeFi protocols, among other complex and/or custom smart contracts, including but not limited to Binance, Tera, Bancor, Shapeshift, and Blockstack.
Consult with one of our experts at firstname.lastname@example.org
AllianceBlock is building the first globally compliant decentralized capital market. The AllianceBlock Protocol is a decentralised, blockchain-agnostic layer 2 that automates the process of converting any digital or crypto asset into a bankable product.
Incubated by three of Europe’s most prestigious incubators: Station F, L39, and Kickstart Innovation in Zurich, and led by a heavily experienced team of ex-JP Morgan, Barclays, BNP Paribas, Goldman Sachs investment bankers, and quants, AllianceBlock is on the path to disrupt the $100 trillion securities market with its state-of-the-art and globally compliant decentralized capital market.
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