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2019

  • in Academy
  • 6 min read

Demystifying Liquidity Mining Rewards

We explain in more detail the methodology and mechanics of liquidity mining, a data-driven, objective methodology for quantifying market maker performance.

In our liquidity mining announcement, we introduced a data-driven, objective methodology for quantifying market maker performance. This serves as the basis for determining fair and open compensation for market makers. So how does it all work? In this post, we explain in more detail the methodology and mechanics of the platform.

Introducing Liquidity Mining: A Marketplace For Market Makers

  • Market making is a huge but inefficient industry in crypto. Exchanges and token issuers pay quantitative hedge funds millions of dollars per year to provide liquidity.
  • We introduce liquidity mining, a digital marketplace for liquidity, powered by the Hummingbot open source software that lets anyone run a market making bot (read the whitepaper).
  • Simulations show that users can earn 10-50% annually while providing the same level of liquidity as a hedge fund. This results in 5-10x cost savings for exchanges and token issuers.
  • We are excited to announce our 8 launch partners that represent a broad cross-section of the crypto market (centralized exchanges, DEX protocols, and token issuers) who will create liquidity mining campaigns that reward their communities for market making.

Liquidity Mining Whitepaper

This summary provides an overview of the Liquidity Mining whitepaper, which introduced a novel approach to liquidity provision in digital asset markets.

The document explores the historical context behind market making, the state of crypto market making in 2019, compensation models, and proposing an innovative liquidity mining model aimed at optimizing the market making process.

  • in Miner
  • 6 min read

Does Community-Based Market Making Work?

Analyzing 2 months of data from $ONE Makers

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Two months ago, in conjunction with our friends from Harmony Protocol, we started an experimental program called $ONE Makers to see if ordinary individuals using Hummingbot to run market making bots could effectively provide the same level of liquidity as professional market makers.

Both we and Harmony viewed $ONE Makers as an experiment. In particular, we wanted to answer the following questions:

  • Could people actually make money or would they get destroyed by more sophisticated players?
  • How many people are needed to effectively replace a professional market maker?

Read on and find out!

Interview with Liquidity Miner Dominator008

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It's been just over two months since the launch of the $ONE Makers liquidity bounty program. With intense competition, bounty hunters have diligently worked to climb the ranks on our newly launched, real-time leaderboard. The trading volume for $ONE in July and August totaled an impressive USD $5.98 million.

In this post, we're excited to introduce Dominator008, who clinched the #1 spot in the August reward period and has earned over 10 ETH in the previous period. Dominator008, a software engineer by profession with a deeply technical background, joined $ONE Makers in mid-July. He is currently utilizing hummingbot to trade various pairs, including ONE.

Interview with Liquidity Miner David Salter

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Three weeks have passed since the launch of the $ONE Makers liquidity bounty program in collaboration with Harmony Protocol. We've witnessed $ONE's trading volume soar beyond 130 million. Bounty hunters are vying fiercely to ascend our leaderboard.

In this edition, we spotlight David Salter, who currently holds the #6 rank (as of July 22, 2019) and has accrued approximately 1ETH in bounty rewards. Boasting a solid technical background, David has extensive experience in the telecommunications and finance sectors. His journey into cryptocurrency trading began in July 2017, and he now consistently achieves 0.5%-3% profit per trade using Hummingbot during his trading sessions.

Join us as we delve into David's experiences and gather insights from his trading strategies!

Introducing Harmony Liquidity Bounties

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A new approach to solving one of the biggest problems that face issuers of digital tokens: liquidity.

For the first Liquidity Bounty, we have partnered with our friends at Harmony Protocol, a Layer 1 blockchain project with key innovations in sharding and network transport, founded by a highly technical team from Google, Apple, and Amazon.

  • in Academy
  • 8 min read

Exchange Types Explained: CLOB, RFQ, AMM

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Since Hummingbot is an open source bot platform that connects to many different exchanges, we have developed a deep understanding of the nuances between various exchange types.

In this post, we discuss the three main methodologies that digital asset exchanges use to facilitate asset transactions. We hope that this post helps crypto traders and developers choose the right exchange for their needs.

TLDR

Exchanges perform the fundamental role in free markets of bringing together and coordinating buyers and sellers. Exchanges provide a venue for these parties to discover one another, negotiate and agree terms, and ultimately transact. Exchanges have adopted multiple methodologies to achieve this:

  • in Academy
  • 4 min read

Hummingbot vs Uniswap: Two Approaches to Liquidity

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Since both Hummingbot and Uniswap are both open source projects that allow users to make money by providing liquidity, many people have asked how they compare to each other.

Below, we shed more light on their similarities and differences and explain why the two projects are highly complementary.

Hummingbot is Live!

Welcome to decentralized market making.

Hummingbot is now public and open-source, and we’re beyond excited to bring this high-frequency market making trading bot to the masses.

The software is currently available on our Github and Docker.