Liquidity Mining Guide: How to Easily Earn Passive Income on Gate?

In the world of cryptocurrencies, Liquidity Mining has become one of the key drivers promoting the development of Decentralized Finance (DeFi). As the “fuel” of the DeFi ecosystem, liquidity mining not only provides users with a new way to earn passive income but also brings a more efficient and decentralized trading experience to the entire crypto market.

Unlike traditional cryptocurrency mining, liquidity mining does not require expensive hardware or specialized computing knowledge. Anyone holding specific crypto assets can become a liquidity provider by injecting funds into the liquidity pools of decentralized exchanges (DEX), earning a share of trading fees and additional token rewards.

01 Core Mechanism of Liquidity Mining

The operation of liquidity mining revolves around the decentralized exchange and the Automated Market Maker (AMM) model. Traditional exchanges rely on order books to match buyers and sellers, whereas DEXs automatically determine asset prices through algorithms, enabling instant peer-to-peer trading.

When users deposit funds into a liquidity pool, they essentially act as market makers. For example, in a trading pair of Ethereum and USDC, liquidity providers need to deposit both assets in a specific ratio to create an asset pool available for other users to trade.

Every time a trader exchanges assets within this pool, they pay a certain percentage of trading fees. These fees are automatically distributed to all liquidity providers, proportional to each provider’s share in the pool.

02 Risks and Opportunities of Liquidity Mining

Liquidity mining may seem simple, but participants must fully understand the associated risks and opportunities to make informed decisions.

The main advantages of liquidity mining include:

• Passive income potential: Participants can earn continuous returns without active management.
• Global participation: Anyone with a crypto wallet and digital assets can participate.
• Ecosystem support: By providing liquidity, users directly support the development of DeFi.
• Additional reward opportunities: Many protocols distribute platform tokens, governance tokens, or NFTs as extra incentives.

The main challenges faced by liquidity mining include:

• Impermanent Loss Risk: When asset prices in the pool fluctuate sharply, liquidity providers may face a reduction in asset value.
• Smart Contract Risks: Code vulnerabilities or hacking attacks could lead to fund losses, often lacking centralized insurance.
• Market Liquidity Shortage: Pools with low trading volume may experience increased slippage, affecting yield stability.
• Project Risks: Some projects may involve fraudulent behaviors like “rug pulls,” requiring cautious evaluation.

03 Differences Between Liquidity Mining and Related Concepts

In the crypto space, liquidity mining, staking, and yield farming are three often-confused concepts. Although all are passive income strategies, they differ significantly in mechanisms and objectives.

Liquidity mining focuses on providing liquidity for decentralized trading, with participants earning trading fee shares and potential token rewards by supplying trading pairs. This process directly supports the operation of the DeFi ecosystem.

Crypto staking relates to the consensus mechanism of blockchain networks, where participants lock tokens to support network security and validation. In Proof of Stake (PoS) blockchains, stakers earn native tokens by validating transactions.

Yield farming is a broader concept encompassing various strategies such as liquidity mining, lending interest, and staking rewards. Yield farmers often move funds across different protocols to pursue the highest annualized returns.

04 Liquidity Mining Opportunities on Gate

As one of the leading global cryptocurrency trading platforms, Gate offers various liquidity mining opportunities, with the most popular being the Gate Launchpool projects.

As of December 25, 2025, four mining projects are still running simultaneously on Gate Launchpool: WET, KYO, STABLE, and NIGHT. These projects set up multiple staking pools covering stablecoins, mainstream assets, and project tokens, with staking periods mainly ranging from 7 to 14 days.

In terms of yield distribution, the annualized percentage rate (APR) for the WET-based pool is 83.07%; KYO’s APR reaches as high as 451.3%; the STABLE project’s STABLE pool APR is 48.24%, also open to GT and BTC pools; the NIGHT project’s NIGHT pool APR is 124.05%, with some pools supporting additional rewards.

05 Token Prices and Market Performance

Understanding the market performance of relevant tokens is crucial when participating in liquidity mining. Taking Gate’s platform token GateToken (GT) as an example, as of December 25, 2025, GT’s real-time price is approximately $10.28, with a market cap of $1.03 billion, and a 24-hour trading volume of 42,100 GT.

GT is the native cryptocurrency of the GateChain ecosystem, used for paying transaction fees, participating in staking, and governance. Its all-time high price was $25.95, and the lowest was $0.2575. Currently, GT has a circulating supply of 100 million GT, with a maximum total supply of 300 million GT.

Having these basic data helps participants evaluate the potential risks and returns of liquidity mining projects, especially when deciding whether to include GT as part of their liquidity mining strategy.

06 How to Safely Participate in Liquidity Mining

For newcomers interested in trying liquidity mining, here are some basic steps and safety tips:

Basic steps to start liquidity mining:

1. Choose a reputable platform: Research and select trusted platforms like Gate Launchpool.
2. Prepare a digital wallet: Set up a compatible crypto wallet and ensure its security.
3. Select a liquidity pool: Choose trading pairs based on risk tolerance and yield goals.
4. Provide liquidity: Deposit equivalent values of two assets into the selected pool.
5. Monitor and manage: Regularly check earnings and adjust strategies based on market changes.

Safety tips for participating in liquidity mining:

• Start small: For initial attempts, begin with small amounts to gain experience.
• Diversify investments: Avoid putting all funds into a single pool; diversification reduces risk.
• Research project background: Study the project team, audit reports, and community feedback to avoid potential scams.
• Keep abreast of market dynamics: Cryptocurrency markets are volatile; timely awareness helps manage risks.
• Use hardware wallets: For large amounts, consider hardware wallets for added security.

As of December 25, 2025, Gate Launchpool has accumulated an airdrop volume of approximately $54.97 million, establishing a stable incentive and user engagement mechanism. Liquidity mining, as a strategy that supports the DeFi ecosystem and offers substantial returns to participants, has successfully connected project initial demand with long-term user engagement.

With the continuous development of the DeFi ecosystem, liquidity mining may become more diversified and sophisticated. For ordinary users, understanding fundamental principles, assessing risks and rewards, and choosing reliable platforms are key to success in this emerging field. Regardless of market changes, prudent decision-making and ongoing learning remain the unchanging rules for participating in cryptocurrency investments.