Project Serum, a decentralized derivatives exchange for the Solana network, has launched a $100 million liquidity mining program as part of a broader effort to attract users to the ecosystem.
The initial allocation was approved by Serums decentralized autonomous organization, or DAO, the project announced Thursday. The sum, paid out in Serums native SRM token, will be used as a reward mechanism for automated market makers that work directly with Serums on-chain order book.
Liquidity mining is an effective tool for DeFi protocols as it incentivizes automated market makers to supply liquidity and enhance the networks overall operation. As a broader concept, liquidity mining refers to a process whereby a project offers its tokens to anyone willing to deposit funds into a smart contract.
Serum Protocol is in a unique position given Solanas enormous growth over the past year. The smart contract platform has a total market capitalization of nearly $60 billion, making it the sixth-largest blockchain project in the world. As Cointelegraph reported, Solana Labs, the developer studio incubating Solana projects, raised over $314 million in a private token sale that concluded in June.
Related: Solana DEX raises $18M Series A from Three Arrows Capital, Coinbase Ventures
In terms of total value locked, or TVL, Serum Protocol ranks 11th among decentralized exchanges at $1.58 billion, according to industry sources. By comparison, Curve has over $18.8 billion in TVL while SushiSwap, PancakeSwap and Uniswap each have over $5 billion.
