How does liquidity mining make money?

Liquidity mining is a relatively new concept in the cryptocurrency space that involves providing liquidity to decentralized exchanges, or DEXs, in exchange for rewards. But how exactly does it make money? Well, for starters, it encourages traders to use DEXs over centralized exchanges by offering them incentives for adding their tokens to liquidity pools. This, in turn, drives up the trading volume on DEXs, which attracts more users and can lead to increased fees for the platform. Additionally, the tokens that are used as rewards in liquidity mining often appreciate in value over time, providing an additional source of income for participants. However, it's important to note that liquidity mining is a risky endeavor, as the value of the tokens used as rewards can fluctuate significantly and the rewards themselves are subject to market conditions. So, while it can be a lucrative way to earn rewards in the cryptocurrency space, it's important to approach it with caution and a thorough understanding of the risks involved.