What is Alpha Liquidity Farm and how does it work?

Liquidity mining allows crypto traders to earn great returns by contributing their funds to pools on decentralized exchanges (DEXs) and lending platforms. Depending on which pool and DEX you choose, you can earn some of the highest yields available in the world of crypto. Bybit Alpha, a component of the Bybit platform that allows you to access decentralized trading opportunities using your Unified Trading Account (UTA), supports on-chain liquidity farming through its Liquidity Farm function. Using the Alpha Liquidity Farm, you can earn trading fee rewards from investing in Solana (SOL)–based liquidity pools without ever needing a decentralized wallet, with all operations easily available in just a few clicks through your Bybit UTA.

Key Takeaways:

• Bybit Alpha Liquidity Farm is a product that allows you to earn yields from Concentrated Liquidity Market Maker (CLMM) liquidity mining directly via your Bybit UTA. 

• It’s the first product in the industry that enables on-chain liquidity mining using a centralized exchange (CEX)–based account.

• Users can set their custom price ranges to contribute liquidity, or select from predefined ranges with different risk profiles. 

What is Bybit Alpha Liquidity Farm?

Bybit Alpha is a platform that lets you access on-chain trading opportunities directly from your Bybit exchange–based account, acting as a user-friendly bridge between decentralized and centralized crypto trading. The platform frees you from the need to handle the procedures typically involved in decentralized finance (DeFi), such as creating on-chain wallets, managing seed phrases and private keys, allocating tokens for gas fee payments and so on. 

The Liquidity Farm is a new product on Bybit Alpha that introduces Concentrated Liquidity Market Maker (CLMM)–based liquidity mining functionality, available directly via your UTA. In CLMM liquidity mining, liquidity providers (LPs) can choose to allocate their funds to a pool within a specific price range to optimize the yields they earn. This is different from the standard automated market maker (AMM) liquidity provision model, in which the allocated funds are used uniformly across the entire price range in the pool.

Thanks to the Alpha Liquidity Farm, centralized exchange (CEX) users can easily pledge their assets to on-chain liquidity pools and earn rewards from the participating DEX platforms. As the Alpha Liquidity Farm is being unveiled, the initial phase will support liquidity provision to the Tether Gold (XAUT)/Tether (USDT) staking pool for tokenized gold tokens. With the further expansion of the platform, there will be liquidity mining opportunities with various pools from DEXs like Byreal (BYREAL) and Orca (ORCA), and for tokenized stock tokens. 

Bybit Alpha Liquidity Farm is a first-of-its-kind product, allowing DEX liquidity mining through a CEX account. Liquidity mining through the platform is now a single-click experience, eliminating the need to manage wallets or gas tokens. The yields provided by the Liquidity Farm typically exceed those available through CEX-based products, and there’s a 0% subscription fee and real-time profit calculation.

How does Alpha Liquidity Farm work?

The Liquidity Farm on Bybit Alpha lets you allocate funds directly from your UTA to CLMM liquidity pools to earn excellent yields. Since CLMM pools allow you to contribute capital within a specific range, you can potentially earn greater yields than from a standard AMM pool by allocating your liquidity to the most actively traded ranges. 

You can choose from three allocation modes: Stable, Standard and Custom: 

• Stable range is designed for users who prefer lower volatility and more predictability, even at the expense of potentially lower yields. 

• Standard range provides a good balance between risk and higher earnings.

• Custom mode allows experienced users to set a range they prefer, providing full control over the risk-to-reward profile.

Users can generate rewards both from the trading fees earned by the DEX pools, and potentially from various incentive tokens that might be offered through promo campaigns.

Supported currencies include SOL, USDT, USDC (USDC) and Bybit Staked SOL (bbSOL). You can also add funds to your stake in the pools supported by the Liquidity Farm at any time with just a few clicks. 

You can withdraw at any time, but please note that if you complete a partial withdrawal, the earned yield will only be released to you after all liquidity has been removed. In addition, if you select to close more than 90% of your position, your full liquidity will automatically be withdrawn. 

Key features and advantages

Bybit Alpha Liquidity Farm offers numerous benefits for both newbies and experienced DeFi veterans, including the following: 

• The ability to benefit from the highly effective CCLM liquidity mining model, with flexible as well as predetermined investment ranges. Experienced traders are given complete control over the range allocation within Custom mode, while beginners can choose Stable or Standard mode to stay on the safer side. 

• One-stop, on-chain trading and financial management without the need to bother with wallet creation, private key management and gas fee payments — features of decentralized trading that many non-crypto natives find to be complex. 

• Seamless integration with your UTA, making cross-account management of funds a breeze. Moreover, the integration with your UTA allows you to easily explore other yield opportunities on Bybit.

• Competitive yields as high as 600% APY at some of the best Solana-based DEXs.

• A simplified user experience that’s suitable for beginners, who often find liquidity mining (especially via the CCLM model) to be intimidating or confusing.

• UTA custody protections offered by Bybit. In contrast, when you use liquidity mining directly via a decentralized wallet, you bear all the custody risks yourself.

Conclusion

Bybit Alpha Liquidity Farm is an innovative product that marks a first in the industry. It bridges the gap between centralized and on-chain liquidity mining, opening up the lucrative opportunities available in CCLM liquidity provision to beginners and non-crypto natives. And for experienced users, it provides complete flexibility for conducting their liquidity mining operations.

Thanks to the Liquidity Farm on Bybit Alpha, attractive yields from CLM pools are now just a few clicks away — directly from your Bybit account.

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