What is Bybit Liquidity Mining?

Bybit Liquidity Mining refers to liquidity pools that are based on the automated market maker (AMM) model offered by Bybit. You can add liquidity to a pool to become a liquidity provider and earn yield from trading fees, as the assets you add to the pool also provide liquidity to the derivatives market on Bybit.

You may also add leverage to maximize your yield. Please note that leveraged liquidity mining may entail liquidation risks.

 

 

 

Which liquidity pairs does Liquidity Mining support?

You can view the supported liquidity pairs here.

 

 

 

What tokens does Bybit support for Liquidity Mining?

Any tokens listed in liquidity mining as part of the trading pair is supported.

 

 

 

How is yield generated for Liquidity Mining products?

Yield is generated by supplying liquidity to the Derivatives market within Bybit, managed by trusted third parties, which might include entities there are affiliated with Bybit. No on-chain activity is involved in the yield generation process.

 

 

 

Are there any fees associated with Liquidity Mining?

Add or Remove Liquidity: Bybit won't charge any fees when you add or remove liquidity. If the liquidity you’ve added exceeds a certain threshold, however, you may experience slippage.

 

 

 

Are there any KYC requirements for Liquidity Mining?

Only individual users who have successfully verified their identity (at least Lv. 1 Basic Verification) can trade Liquidity Mining. To learn more about KYC verification, please refer to the Individual KYC FAQ. Do note that users with Business Identity Verification are also able to purchase this product.

 

 

 

Can I purchase Bybit Liquidity Mining products using subaccounts?

Yes, you can purchase Liquidity Mining products using subaccounts.

 

 

 

Is there any risk associated with my principal?

Bybit's Liquidity Mining implements the x × y = k rule to ensure that the product of the quantities of your added tokens remains fixed over time. Liquidity pools, however, may be subject to impermanent loss.

 

Note: 𝑥 × y = k, where x and y represent the quantity of each token in the liquidity pool, and k is a predefined constant.

 

 

 

How is my liquidity derived?

Bybit's Liquidity Mining allows you to add a single token or two tokens to the corresponding pool. The system will automatically balance the token quantities based on the current pool composition.

Your liquidity depends on your liquidity composition and the index price of the Derivatives Contracts. Let’s run an example:

 

Please note that our liquidity composition and liquidity amount will be updated every five minutes.

 

 

 

How does the price movement affect my liquidity value?

Liquidity Mining implements the 𝑥 x y = k rule to ensure that the product of the quantities of your added tokens remains fixed over time and so it will affect the liquidity value according to the different price movements. Below is an example of how the price movement affects the liquidity value.

Assuming Trader A adds 30,000 USDT to the BTC/USDT liquidity pool while the price of BTC is 30,000 USDT. the system will automatically rebalance the principal into equal value to the liquidity pool. At this price, his liquidity value is 0.5 BTC and 15,000 USDT.

According to the rule of 𝑥 x y = k, we can derive k = 0.5 × 15,000 = 7,500

One year later, the BTC price rises to 36,000 USDT. Trader A's new liquidity value will be 0.456 BTC and 16,431.677 USDT, with a total value of  32,863.35 USDT. 

By knowing k = constant, we can now calculate x and y to derive the composition of the two tokens.
k = 7,500
y = 36,000𝑥
𝑥 x 36,000𝑥 = 7,500
𝑥 = 0.456 BTC
y= 36,000 x 0.456 = 16,431.677 USDT

If the price of BTC drops to 24,000 USDT one year later, Trader A's new liquidity value will be 0.559 BTC and 13,416.408 USDT with a total value of 26,832.81 USDT. 
k = 7,500
y = 24,000𝑥
𝑥 x 24,000𝑥 = 7,500
𝑥 = 0.559 BTC
y= 24,000 x 0.559 = 13,416.408 USDT

 

 

 

Is there a limit to the quantity of a liquidity mining order?

Yes. The specific minimum/maximum order quantity can be viewed in the order zone.

 

 

 

 

What is the maximum leverage for Liquidity Mining?

The maximum leverage of each liquidity pair can be viewed in the order zone.

 

 

 

How to calculate the Estimated APY?

Estimated APY is based on Liquidity Pool APY and Leverage.

Formula: Est. APY = APY of the liquidity pool × Leverage

Please note that the APY of the liquidity pool is calculated based on the actual yield of the previous three (3) days.

 

 

 

What is Total Yield?

Total Yield refers to the total rate of return from the liquidity pool. Your total yield will be updated hourly.

 

 

 

How do I calculate my yield?

The actual amount of liquidity that has been added to the pool is calculated with leverage. Please note that your yield will be calculated based on your liquidity amount.

 

Formula

Your yield = (your liquidity/total pool liquidity) × total yield from the pool

 

Example

Let’s say that the BTC price is $40,000, and Trader A adds 0.1 BTC into the BTC/USDT liquidity pool with 2x leverage at 12AM (midnight) UTC. 

In this case, Trader A's principal will be $4,000 (or 0.1 × 40,000), and their liquidity will be $8,000 (or 4,000 × 2). If the total amount of liquidity in the pool is $1,000,000 and its total yield in the last 24 hours is 1,000 USDT, Trader A can claim 8 USDT (8,000/1,000,000 × 1,000) at 12AM (midnight) UTC on the next day.

 

 

 

How often is the unclaimed yield amount updated?

The amount of yield that's yet to be claimed will be updated hourly. In addition, when you remove liquidity, the unclaimed yield of the liquidity will be automatically distributed to your Funding Account.

 

 

 

Can I reinvest my yield at any time?

Yes. Your unclaimed reward can be reinvested immediately into the liquidity pool if it's ≥ 1 USDT.

 

 

 

Is there a liquidation risk for my liquidity mining position?

There is no liquidation risk if you do not add leverage. However, you may have liquidation risks if leverage has been applied.

Please note that all principal investment could be lost if the positions are liquidated. You may add USDT to reduce your leverage and to minimize liquidation risks.

To learn more about how to reduce leverage, please refer to Liquidation Price (Liquidity Mining).

 

 

 

Will the liquidation risk of Liquidity Mining be lower than that of USDT Perpetual Contracts?

Taking 2x leverage as an example, the liquidation price in Liquidity Mining is 1/4 of the entry price, while the Derivatives Contract is 1/2 of the entry price. Therefore, the risk of Liquidity Mining is lower than that of Derivatives Contracts.

 

 

 

Under what circumstances will I receive a risk notification for Liquidity Mining? 

You may receive three (3) liquidation alerts via email, app push and notification as follows:

1. Liquidation Alert: When your Liquidity Mining position is 20% away from the liquidation price, you’ll receive an email, app push and notification informing you to add USDT to reduce your position leverage, thereby preventing your account from being liquidated. You will receive such a liquidation alert no more frequently than every 24 hours.
2. Liquidation Alert: When your Liquidity Mining position is 10% away from the liquidation price, you’ll receive an email, app push and notification to inform you to deposit more USDT to avoid liquidation. You will receive such a liquidation alert no more frequently than every 24 hours. 
3. Liquidation Notification: When your Liquidity Mining position has been liquidated, you will receive liquidation details for the liquidity pair.

Notes:

— It is strongly recommended for users to continue monitoring their positions in case of liquidation alert delay or glitch. Bybit will not be held responsible for liquidations resulting directly or indirectly from this alert feature’s malfunction.

— The added funds will not be added to the liquidity pool but simply used to pay back your leveraged lending portion.

— If the liquidation price of a liquidity pair does not change, you will only receive a liquidation alert once within a 24-hour period. 

 

 

 

Where can I view my liquidity order history?

Please head to Liquidity Mining in your Earn Account under Assets. From there, you can see Effective Orders and All Orders tabs.

Effective Orders: You can view the details of active orders, including Pair, Principal (Change), Liquidity (Change), Liquidation Price, APY, Total Yield, Unclaimed Yield and more.
 

 

All Orders: You can check all order details through the following categories: Liquidity, Claimed Yield, Liquidation, Pair, Date and Type.