We’re excited to announce Liquidity Bounties, a new approach to solving one of the biggest problems faced by issuers of digital tokens: liquidity.
For the first Liquidity Bounty, we have partnered with our friends at Harmony Protocol, a Layer 1 blockchain project with key innovations in sharding and network transport, founded by a highly technical team from Google, Apple, and Amazon.
A new incentive structure: liquidity bounties
This community-based approach to market making unlocks a new compensation model that we call liquidity bounties. Inspired by bug bounties, liquidity bounties allow Hummingbot users to earn rewards when providing liquidity to a token issuer.
Instead of giving millions in inventory and fees to a single market making firm without much visibility into whether they are actually doing their job, token issuers can now set reward tiers based on hard, quantifiable metrics such as open order volume and filled order volume. Rather than paying steep upfront fees without clear metrics of success, token issuers can pay only when specific liquidity objectives are achieved. Rather than lining the pockets of a wealthy hedge fund manager, issuers can reward members of their community based on their actual liquidity contribution.
Anyone who is eligible to trade the token can now compete with others to earn extra tokens based on their periodic trading activity. Bounty program participants can see where they rank versus others via a public leaderboard.
We take compliance extremely seriously. Liquidity bounty participants need to opt into data collection, which allows us to verify their trading activity against our internal exchange data feeds and prevent reporting of fake volume. In addition, we will run proprietary algorithms to detect wash trading, spoofing, and other bad practices.
Liquidity bounties also help token issuers boost liquidity across multiple exchanges. Hummingbot is an open source platform with connectors to both centralized and decentralized exchanges, and we will work with our liquidity bounty partners to prioritize the venues where their tokens trade. Since users can run Hummingbot’s cross-exchange market making strategy in order to port liquidity from one exchange to another, token issuers should see greater price stability and more even liquidity across the exchange landscape.
Announcing ONE Makers, the liquidity bounty for Harmony Protocol
We’re incredibly pumped to be working with our close friends at Harmony Protocol for the first liquidity bounty. A fast and scalable Layer 1 protocol, Harmony has a strong technical team from Google, Apple, and Amazon who is laser-focused on shipping product. Less than a year after launching, they are already live on mainnet with real working dApps that offer seamless UX while maintaining core state on a sharded blockchain.
But I think the secret to their success lies in their dedication to growing a large, global community that values technical rigor. Harmony began as a weekly gathering of former Googlers and friends who got together to discuss academic research into machine learning and blockchain. In fact, it was at one of these gatherings in early 2017 that Carlo, Martin, and I all met and started CoinAlpha, the company behind Hummingbot.
Today, the Harmony community spans the globe. Reflecting the highly technical nature of the team and the project, there is a disproportionate number of developers, data scientists, and others with the technical acumen to run algorithmic trading software like Hummingbot, which makes Harmony the ideal initial partner for Liquidity Bounties.
How to get started
Starting in a few weeks, anyone eligible to trade ONE can earn extra ONE tokens by market making on Binance as well as other exchanges where ONE may trade. Please sign up here in order to be notified when the program commences.
Not Financial, Legal, or Tax Advice
The content of this Site does not constitute financial, investment, legal, or tax advice. You (the reader of this disclaimer, as well as any user of the Hummingbot software) are solely responsible for conducting any legal, accounting, or due diligence review before determining whether to download and use this open-source software and/or participate in any Bounty Programs. You should obtain investment and tax advice from the appropriate advisers before deciding to use Hummingbot or participate in any Bounty Programs.
None of the information contained on this Site constitutes a recommendation, solicitation, or offer to buy or sell any securities, options, or other financial instruments or other assets, or to provide any investment advice or service. The information contained in this Site has been prepared without reference to any particular User’s jurisdiction or location, applicable regulatory authorities, or financial situation, or any other relevant factor that may affect whether a given User can use Hummingbot consistent with any relevant law.
By participating in a Bounty Program, you are agreeing to sharing the following information with CoinAlpha, the Token Issuer that is conducting the Bounty Program, and their respective affiliates:
- Orders created by your use of Hummingbot;
- Transactions completed by your use of Hummingbot;
- Your Ethereum wallet address: where bounty awards, if any, are to be received.
When sharing data from Hummingbot, you are solely responsible for configuring what information you agree to share through the Hummingbot log configuration settings (please see example log templates).
For additional terms related to the sharing and use of your data, please review the following:
Bay Area Quant Crypto Traders Meetup #3
June marks the return of our well-received quant crypto trader meetups! At this meetup, we are excited to host a fireside chat with Kevin Zhou, Head Trader at leading quant crypto hedge fund Galois Capital, about crypto market making. Come join us to learn and network. Hope to see you soon! 🤩
When: 6:30pm Thursday June 27, 2019
Where: Atrium LLP, San Francisco