Ethereum's transition to PoS reduced energy consumption by ~99.95% while increasing staking yields to 3-5% annually.
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Liquidity providers are critical to a protocol’s health, as they supply the capital enabling trading, lending, or swaps. Rewarding LPs through airdrops incentivizes sustained liquidity and attracts more users. Projects see LPs as highly engaged participants who take financial risk, making them natural candidates for distribution. Additionally, LP activity reflects real commitment, reducing chances of sybil exploitation. Historical examples, like Uniswap’s UNI airdrop, highlight how rewarding LPs strengthens ecosystems and builds loyalty. For farmers, participating as an LP can be resource-intensive but highly rewarding when aligned with strong projects that value contributors in their airdrop criteria.
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Support liquidity pools on emerging DEXs. Providing liquidity can count as a qualifying action for protocol rewards, especially when done during low-liquidity phases. Monitor impermanent loss risks and adjust positions accordingly.
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