An introduction to Nova’s first liquidity mining program.
What is liquidity mining?
Within Decentralized Finance (DeFi), people exchange assets through a tool called an automated market maker (AMM). These AMMs are very useful because they can swap assets instantly without needing a matching buyer.
To work out a fair price, the AMM makes a calculation based on how much of each asset it has stored within its reserve. The assets within this reserve are often referred to as “liquidity” as they are used to calculate the price and fulfill the other side of the trade. For Nova’s AMM, the assets used for liquidity will be NOVA & USDC.
In DeFi, people provide liquidity to the AMM and in return, they receive tokens and trade fees as a reward for their help.
The name “liquidity mining” comes from the system's similarities to how Bitcoin proof of work happens where instead of computing power being provided to earn coins, people provide liquidity to receive tokens.
Why participate?
This is your chance to support the Nova ecosystem and help it grow! Providing liquidity makes it easier for other people to take part in the Nova ecosystem.
Having decentralized liquidity also opens up opportunities for other protocols to utilize the Nova token for activities such as lending.
If you are a long-term supporter of Nova, this is a good way to earn Nova token. Nova tokens will be valuable at the product launch and our governance release shortly after!
Next Steps
In the next few days, we will be announcing the location and rewards schedule for the liquidity pool. At that point, you will be able to participate in the liquidity mining program.
Shortly after, we will be posting some written and video guides on participating, so don’t worry if you aren’t sure how to get started!
About Nova Finance
Nova is a programmable asset framework that allows people to access DeFi without having to learn complex financial management skills. Within the product, users can create a portfolio of assets that auto-generate returns through yield strategies while auto-executing on investment strategies such as dollar-cost averaging, take profit calls, and much more.
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