You can earn extra money from your bot in 2 extra ways associated with the term Liquidity Mining.

To get started you will need 2 things in addition to your trading bot.

1. Sign up for Liquidity Mining Rewards here: https://miner.hummingbot.io/login

2. You will also need API (read only) keys from at least 1 of the 4 supported exchanges: Binance, Kucoin, AscendEX, or Gate.io

Full Liquidity Mining Calculations

Liquidity Mining is defined as earning interest for doing exactly that, providing liquidity between certain pricing thresholds of an assets.

Take for example Liquidity Mining on the coin pair FEAR/USDT, one of my favorites to trade because of the high rewards/week category.

The spread I must maintain in order to earn rewards (interest) from liquidity mining, or maintaining active orders in the FEAR market must remain within 2% of mid-price.

That means that as long as my orders on the order book are within 2% of the mid-price, I will receive interest/rewards for my orders in either f these scenarios:

1. Bot places order(s) within 2% of mid-price, and the order gets filled or executes.
2. Bot places order(s) within 2% of mid-price, and the order gets canceled, or fails to execute, or price moves beyond the 2% threshold

If scenario #1 occurs, you will earn EXTRA/MORE interest for your filled orders compared to orders tat DO NOT execute.

If scenario #2 occurs, you will earn SOME/LESS interest for your order remaining on orderbook, within that 2% threshold until the mid-prices moves beyond 2% of your sitting order.

In the event your order cancels before it ever gets executed/fills, you will earn scenario #2 rewards until such expiration.

*In this example you can see I have 1 open order

The order tracking page will show your bots progress in 3 categories.

GREEN – Your order got filled somewhere on the timeline.

ORANGE – Your order is currently open on the timeline.

GREY – Your order has been canceled along the timeline.

Best Practices – Strategy Configurations

These are example configurations you might use to run this strategy – You may also “import” and “config” any other prebuilt strategy to run Liquidity Mining Campaigns

Update: New test results indicate setting order_refresh_tolerance_pct to -1 , min_spread to .1 to avoid any API issues.

Yellow – If you have a low Max Spread like 2% for your coin pair, you need to configure your spreads BELOW 2% and make sure your order levels are all placed below this spread. You can check your open orders current levels when your bots running with the “status” command.

Configurations associated with Yellow include: Bid/Ask spreads and Order Levels/Spreads

Blue – Is associated with your rewards pool. You earn rewards for open/filled orders. So the longer your orders stay on book, or the more orders you fill, the more $$$ you can make. Tighter spreads also = $$$

Configurations associated with Blue include: Order Refresh Times, Max Order Age, Min Spread, and Order Refresh Tolerance Percentage

Red – Shows how competitive your coin pair is. The lower coin pairs on the list are riskier but have higher daily yields. Choose your coin pair with caution

Configurations associated with Red include: Only Market, however you will need to reconfigure all other parameters each time you change markets. Another option is to build templates for your favorites.

*Keys and there Value parameters can be changed by running the command “config your_key”, then enter your new value.

Important Keys, Values & Questions to Ask Yourself

Bid & Ask spreads –  What is the maximum spread you can have in order to still earn rewards? Will you be ONLY Buying, or Selling or Both?

Your crypto trading bots strategy might need to be straightforward or use a hundred different sequences when making calculations and decisions of what to execute.

But bear in mind that, before you press “start”, a most important question must be posed (and resolved):

What will I do about my orders?

When and how your crypto bots orders will be created (or canceled) on the market is the ultimate decision you must answer.

“Understanding how orders are managed is a crucial piece of finding a profitable strategy.” – Hummingbot.io

For a detailed guide/example on all parameters you can adjust see here: https://hummingbot.io/en/blog/2021-02-extracting-value-hbot-market-maker-orders

For more details visit: https://hummingbot.io/en/academy/liquidity-mining