Recently, DeFi has been on fire, and several friends around me have started getting into it. A couple of days ago, I was chatting with my friend Lao Wang, and he said he has been doing liquidity mining lately, and the returns have been pretty good.

I asked him, 'Lao Wang, what is liquidity mining? It sounds very impressive.'

Lao Wang explained to me that it’s actually just lending your digital assets to a DeFi platform, which uses these assets to provide trading services and then gives you some interest or tokens as a reward. It's like putting money in a bank, and the bank gives you interest.

He also mentioned a key point, which is 'impermanent loss.' He said that while liquidity mining can yield high returns, the risks are not small either. If the prices of the two tokens deposited fluctuate too much, you might incur losses. Therefore, choosing the liquidity pool is very important; you should try to pick pairs with low price volatility.

After listening to Lao Wang, I feel like I have learned something new. The DeFi world is truly full of opportunities and challenges, and it seems I need to study it well to strive to join this wealth feast as soon as possible! When everyone plays DeFi, be sure to pay attention to risk control, don’t just think about making money, safety first!