One of the most popular ways for bootstrapping a DeFi project is through Liquidity Mining. Most DeFi projects are two-sided marketplaces for some type of financial service — for example, Compound is a marketplace for borrowers/lenders and Uniswap is a marketplace for LPs/traders. Bootstrapping a new two-sided marketplace is difficult because of the cold-start problem: if there is no demand, there won’t be supply, and if there is no supply there will be no demand. This is where tokens come in handy — projects can incentivize one (or both) sides of the marketplace through distributing their own token to kickstart the demand-supply flywheel.