What Is Liquidity Mining?

Liquidity mining is a DeFi mechanism where users deposit token pairs into decentralized exchange pools and earn reward tokens in return. It incentivizes liquidity providers to create deep markets for trading. Whale participation in liquidity mining moves large amounts of capital on-chain, making these transactions visible on Sonar Tracker as DEFI-classified activities. When whales enter or exit liquidity mining positions, it can significantly impact token prices through the addition or removal of liquidity. Tracking whale liquidity mining activity provides insight into which protocols and token pairs attract institutional-grade capital.