> For the complete documentation index, see [llms.txt](https://diode-mixer.gitbook.io/diode-mixer/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://diode-mixer.gitbook.io/diode-mixer/key-features/liquidity-mining.md).

# Liquidity mining

In the Diode Mixer protocol, any user can earn rewards by adding liquidity to DIODE transaction pool. Liquidity mining creates a really powerful incentive for Diode Mixer’s early users who are encouraged to actively add liquidity and participate in the protocol. In this way a “flywheel effect” forms.

Diode Mixer’s liquidity mining is similar to other DeFi projects’: in Diode Mixer’s Tokenomics, 10 billion (10%) DIODE will be used to reward liquidity providers. When the Diode Mixer protocol is launched, DIODE tokens will be unlocked from the “liquidity mining” reserve on a daily basis by blocks as a liquidity incentive to reward liquidity providers in DEXs.

Users who provide liquidity to the DIODE transaction pool will receive a corresponding share of tokens, i.e., LP Token which can be staked on the liquidity rewards page. Users then will receive a corresponding share liquidity rewards (staked LP Token / total staked LP Token). The staked LP Token can be retrieved at any time.

DIODE tokens for liquidity bonus will be released per block and will go directly to the DIODE staking pool. Users can enjoy the dividends from the staking pool immediately. There is no lock-up requirement. DIODE can be withdrawn at any time, but the withdrawal will trigger a “penalty mechanism”, i.e. users will be charged 10% of DIODE when withdrawing from the staking pool, of which 4% will be used to reward other “loyal users” holding DIODE in the staking pool.


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