What is Liquidity Mining?

Liquidity mining (also called liquidity provision or liquidity farming) is the process of depositing tokens into a decentralised exchange's liquidity pool to facilitate trading. In return, you earn a share of the trading fees collected every time a swap routes through the pool your tokens are in.

How Liquidity Pools Work

A liquidity pool is a smart contract that holds reserves of two (or more) tokens. When a user swaps Token A for Token B, the pool's reserves adjust: it gives out Token B and takes in Token A. An algorithm called an Automated Market Maker (AMM) calculates the exchange rate based on the ratio of tokens in the pool. Larger pools with deeper reserves offer better prices and lower slippage for traders.

As a liquidity provider, you deposit both tokens into the pool and receive a proportional share of all fees generated.

Constant Product (CPMM) vs Concentrated Liquidity (CLMM)

Traditional AMMs (like Uniswap V2 or Raydium's CPMM pools) spread your liquidity evenly across the entire price curve, from zero to infinity. This means most of your capital sits idle in price ranges where trading rarely occurs.

Concentrated liquidity (CLMM), the model used by Byreal, lets you focus your capital within a specific price range that you choose. For example, if you believe SOL will trade between $140 and $160 over the next week, you can concentrate your liquidity in that range. This dramatically improves capital efficiency: a concentrated position can provide the same effective liquidity as a much larger position spread across the full curve.

Byreal's CLMM pools use discrete price ticks (each representing a 0.0001% price increment) to cluster liquidity around active trading levels. Pools offer different fee tiers — lower tiers with tighter tick spacing suit stable pairs, while higher fee tiers with wider spacing are better for volatile assets.

Why Provide Liquidity on Byreal?

• Earn trading fees: Every swap that routes through your pool pays a fee, and 80% of that fee goes directly to LPs.

• Capital efficiency: CLMM lets you earn more fees per dollar deposited by concentrating your capital where trades actually happen.

• Additional incentives: Byreal distributes token rewards to LPs on eligible pools, on top of trading fees.

• Copy Farming boost: If other users copy your LP position through Real Farmer, you earn referral rewards and yield boosts.