Beginners Guide

A 3 Minute Guide to Yield Farming – Earn Passive Crypto Income

Written by: Sara K

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Sara K

Sara is steadily working on cryptocurrency evaluations, news, and fluctuations in digital currency prices. She is guest author associated with many cryptocurrencies admin and contributes as an active guide to readers about recent updates on virtual currencies.

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Aug 18, 2020

As the rise in the new financial protocols continues, there is a rapid increase in the number of users. Decentralized finance (Defi) has shown significant progress in the blockchain space. The fact that they are permissionless and trustless makes them unique.

One of the new concepts that have emerged recently is Yield farming. It is more commonly referred to as the process of earning the native platform tokens using the protocol.

In this article, we will provide the complete guide of Yield farming and its overall aspects. Let us look into this Yield farming review in detail now.

Background

As COMP token, the native token of Compound finance was launched, it formed a key part in the Defi ecosystem. Thus this led to the development and launch of Yield farming. Yield farming paves the way for earning interest through your holdings.

Weeb McGee was the person who built Yield farming. It is considered to be one of the most popular tools in decentralized finance. Since then, many other Defi projects have shown up. They aim to attract liquidity in their ecosystems.

Yield farming has shown extensive growth and since its launch and continues to show rapid progress in the Defi ecosystem.

What Is Yield Farming?

Yield farming provides a means of earning interest by investing crypto in the Defi market. Through the concept of smart contracts, it helps you to lend your funds to other users. With this, you will earn some fees in the cryptos.

Yield farming paves the way for earning rewards with your cryptocurrency holdings. In general terms, you get rewards in return for locking up the cryptocurrencies. Yield farming is often also referred to as liquidity mining.

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