Liquidity mining, a form of yield farming, is the provision of liquidity to exchanges or other platforms in order to earn governance token rewards during a specified period.
Liquidity farming is now a broad concept around the crypto space as it has moved beyond decentralized exchanges. Now DeFi protocols launch with robust liquidity provider incentives around their token to boost the project. A liquidity miner can choose to earn passive income through a number of days as yield farming continues to evolve.
One can stake or provide liquidity to DeFi tokens on decentralized exchanges and earn yield through the decentralized exchange or the DeFi protocol. A liquidity miner can also invest in a stablecoin or a DeFi lending protocol and earn interest. Liquidity mining is further incentivized with governance giving miners voting rights.