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Hummingbot Blog

  • in Academy
  • 14 min read

Liquidity Mining in Hummingbot vs DeFi

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The need for liquidity is as constant a theme in the cryptocurrency market as are death and taxes. However, as we have previously written in other blogs (such as this one, the way in which token issuers and exchanges procure market making in the crypto market is broken. The reliance on high cost, price gouging crypto market makers is just not sustainable or scalable. This led us to propose the concept of liquidity mining and launch the Hummingbot Miners platform for decentralized and crowd-sourced market making.

We have been encouraged to see other projects experiment with community-based liquidity provision, most notably in DeFi with automated market makers (AMM). Whether it’s called “liquidity mining” or “yield farming”, there has been a surge in activity in DeFi as protocols such as Compound, Synthetix, Balancer, Ampleforth, and Loopring aim to propel wider market adoption by rewarding their communities for providing liquidity.

With this heightened interest in liquidity mining, we explain in this blog how our Hummingbot Miner platform fits into the landscape. We also compare and contrast liquidity mining in the order book model popularized by centralized exchanges versus the automatic market maker (AMM) model that is prevalent in DeFi.

Interview with Community Member Vik

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2023 Update: Discover Vik's journey in Botcamp!

Over four months have passed since we initiated Liquidity Mining. With an increasing number of token projects and miners, our platform has seen significant growth. In this post, we feature Vik, one of our top liquidity miners, and her insightful experiences.

Vik embarked on her Bitcoin journey in December 2017, purchasing at the market peak. Despite significant losses in the following year, she persevered, refining her trading strategies and eventually discovering the benefits of liquidity mining. Currently, she achieves a monthly return of approximately 5-7% through this approach.

Interview with Market Maker Harry Yeh

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We recently had the opportunity to interview Harry Yeh, Managing Partner at Binary Fintech Group, who brings over seven years of experience in the cryptocurrency trading industry.

Binary Fintech Group, initially established as an Over-the-Counter (OTC) trading desk, caters to a select group of crypto traders. Recently, leveraging the capabilities of Hummingbot, they have embarked on implementing high-frequency market making strategies.

In this post, we share key excerpts from our video interview, wherein Harry imparts valuable insights into the nuances of crypto algorithmic trading and market making.

Introducing the Celo Arbitrage Bot

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TL;DR

In the next release of Hummingbot (ETA 2 weeks), we will be officially supporting the Celo blockchain protocol and releasing a new algorithmic trading strategy called celo-arb.

This strategy will allow anyone with cGLD or cUSD, the two native tokens of the Celo ecosystem, to earn arbitrage profits while contributing to the stability of the Celo protocol.

In addition, this strategy bridges the disparate worlds of centralized order book exchanges and decentralized automated market makers (AMMs), improving efficiency and price discovery for both.

Interview with Liquidity Miner Neohowie

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Nearly three months have passed since the launch of Miner. We are thrilled to witness the enthusiastic participation and fierce competition among many miners in our liquidity mining program.

In this post, we introduce Neohowie, a consistent ranker in our Weekly Top 10. Beginning his crypto journey in 2015, he has gained significant insights into market making through our liquidity mining program. Let's explore his journey!

Interview with Liquidity Miner Lorenzo

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It's been just over two months since the launch of our Liquidity Mining program. With intense competition, miners have been diligently striving to ascend our leaderboard. We've witnessed an increase in miners joining the program and investing substantial asset amounts.

In this post, we introduce Lorenzo Boyice, a relatively new member of our community who has consistently ranked in the Weekly Top 10 for the past few weeks. In 2010, he faced a dilemma when hackers demanded a 21 Bitcoin ransom to unlock his computer files. Now, as a software engineer, he began investing in cryptocurrencies in late 2018/early 2019. Through liquidity mining, his current monthly return ranges between 3-5%.

  • in Miner
  • 3 min read

Introducing the Eagle Club

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We are excited to announce that we are launching the Eagle Club, a VIP program for top liquidity miners today. The goal of the Club is to enhance the user experience of top performing miners and to provide dedicated support to help them trade more confidently and perform better.

Along with the launch of the Eagle Club, we have also rolled out a real-time leaderboard where miners can see how they rank versus other miners.

Qualification

The Eagle Club is invite-only. It’s not only a VIP program that Team Hummingbot will devote energy and time to, but also a close-knit community for experienced crypto traders to share their thoughts and obtain personalized support.

At the first month of launch, we will invite top 10 miners of each past week to the Club. Members who are qualified for the Club will be receiving an invitation email. Anyone who gets in will stay in the Club permanently. In the long term, we plan to invite approximately 10% of our total user base to the Club.

Hummingbot Collaborates With Binance

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Hummingbot is excited to announce that it is working with Binance on two strategic initiatives:

  1. Bringing new algorithmic traders to Binance using Hummingbot and
  2. Expanding liquidity mining with an issuer referral program.

Hummingbot is an open-source crypto trading software client that allows users to trade cryptocurrency with high-frequency trading strategies such as market making and arbitrage. Hummingbot currently supports nine exchanges, both centralized and decentralized. Binance was among the first exchanges that Hummingbot supported at launch.

Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies. Since early 2018, Binance has been considered as the biggest cryptocurrency exchange in the world in terms of trading volume.

  • in Miner
  • 6 min read

🌊⛏ Liquidity Mining Launch!

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Today marks an important milestone for Hummingbot as we launch the first live campaigns for liquidity mining! The inaugural campaigns will last for a period of 12 weeks with a total reward pool of USDC 51,000.

The first four campaigns go live at 12.00am UTC March 3, 2020 for a subset of our launch partners:

  • Harmony
  • iExec
  • Zcoin
  • Zilliqa

These initial campaigns will reward participants for trading in eligible tokens on Binance.com. For up-to-date campaign terms and participation details, please go to the Hummingbot Miner's app or Documentation Site: Active Campaigns.

Rewards will be paid out weekly based on weekly periods beginning on Tuesdays 12.00am GMT through the following Tuesday.

Hummingbot Partners with KuCoin

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Hummingbot is thrilled to announce that it has partnered with leading crypto exchange KuCoin to bring Hummingbot’s trading capabilities to the exchange.

KuCoin Exchange Connector

Integrating Hummingbot to KuCoin will enable KuCoin's account holders to deploy Hummingbot’s quantitative and algorithmic strategies to engage in high frequency, automated trading. Currently available strategies include market making, arbitrage, liquidity mirroring, as well as trade execution strategies such as TWAP and VWAP execution. Hummingbot also allows users to create their own custom strategies.

Development of the KuCoin exchange connector is already underway. The connector is currently undergoing testing and we expect to release the integration by the end of January 2020.