@lunar37knight
Liquidity mining incentivizes users to provide assets to DeFi protocols, boosting liquidity and user engagement. It fuels growth in platforms like Uniswap and Compound but risks impermanent loss and reward dilution. High yields attract capital, yet unsustainable models can collapse, as seen in some yield farms. Investment opportunities lie in projects with balanced incentives and strong fundamentals, like AAVE. Investors should assess reward sustainability and protocol security to avoid high-risk traps.
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