© CCFOUND sp. z o.o. sp.k.

Yield Farming what is it ??

Recently, there is a craze for some yield farms on the web. Who knows what it is about and what is it about ??

Recently, there is a craze for some yield farms on the web. Who knows what it is about and what is it about ??

Show original content

1 user upvote it!

2 answers


J

It is a method of using idle cryptocurrencies such as coins, tokens, stablecoins. As a lender, we become a kind of bank and by lending our assets in the decentralized financial world, we generate interest rates ranging from 0.25% for some tokens to over 142% for some MKR loans. As DeFi users, we usually block selected coins using the MetaMask browser plugin. Blocking the funds means that the wallet will communicate with the smart contract on the Ethereum network. Depending on the logic of smart contracts, there are different ways to earn money, although the most traditional is to charge interest on a cryptocurrency loan. One example is the Compound protocol where the algorithm daily checks everyone who has borrowed money in the app and who has borrowed from it, and gives them a COMP proportional to their share of the day's activity.

Passive income from DeFi loans and rates is not guaranteed and returns will depend on each protocol's approach. You need to be aware of the risks associated with this, for example, losing promised returns due to slow trades or market volatility, or even losing your entire amount or transaction fees exceeding your returns.


It is a method of using idle cryptocurrencies such as coins, tokens, stablecoins. As a lender, we become a kind of bank and by lending our assets in the decentralized financial world, we generate interest rates ranging from 0.25% for some tokens to over 142% for some MKR loans. As DeFi users, we usually block selected coins using the MetaMask browser plugin. Blocking the funds means that the wallet will communicate with the smart contract on the Ethereum network. Depending on the logic of smart contracts, there are different ways to earn money, although the most traditional is to charge interest on a cryptocurrency loan. One example is the Compound protocol where the algorithm daily checks everyone who has borrowed money in the app and who has borrowed from it, and gives them a COMP proportional to their share of the day's activity.

Passive income from DeFi loans and rates is not guaranteed and returns will depend on each protocol's approach. You need to be aware of the risks associated with this, for example, losing promised returns due to slow trades or market volatility, or even losing your entire amount or transaction fees exceeding your returns.


Machine translated


1 like

O
Yield Farming is a new trend in the world of cryptocurrencies, involving earning profits on assets that bring profits, such as stablecoins or DeFi tokens. Participants in farming are required to provide their financial resources to specific platforms, where they are used to generate profits that are then shared among them. This is a way of passively generating income in the world of cryptocurrencies.
Yield Farming is a new trend in the world of cryptocurrencies, involving earning profits on assets that bring profits, such as stablecoins or DeFi tokens. Participants in farming are required to provide their financial resources to specific platforms, where they are used to generate profits that are then shared among them. This is a way of passively generating income in the world of cryptocurrencies.

Machine translated