Decentralized Finance (DeFi) is one of the most rapidly growing sectors within the crypto space. DeFi is basically a decentralized banking process where cryptocurrency tokens work as money using what we call as decentralized applications (DApps) or smart contracts.
Recently, “Yield-Farming” has been the major buzzword in the entire crypto space and has caught the attention of investors. Yield-Farming is the process wherein the investors can lend their yield-farming cryptocurrency tokens and earn more crypto in the form of interest rewards.
Another popular name for yield-farming is liquidity-mining since the major purpose of the entire ecosystem is to provide more liquidity in the market. Yield-farming allows users to generate passive rewards by just lending their token holdings using different permission-less liquidity protocols.
Yield-farming is somewhat similar to the concept of staking but comes with some complex frameworks in the background. The investors who add funds to the liquidity protocols are called Liquidity Providers (LPs). The LPs are then rewarded for offering their funds through the fees generated by the underlying DeFi protocols.
Connecting With A Wide Range of Liquidity Pools
Yield-Farming.io is one such interesting project that serves as a one-stop destination for investors to choose from a number of pool pairs available on its home page. Yield-farming.io is developed with the aim of having an ecosystem that offers sustainable rewards to investors with very little risk exposure.
The platform provides easy access to different Yield-Farming liquidity pools while reducing any barrier for users to start farming and earning their $YEILD tokens.
The YIELD token has been listed on some of the major data aggregator platforms like CoinMarketcap and CoinGeckco. Among all the available listed pool-pairs available on the Yield-Farming home page, users can move to the respective staking portal. You can learn more about the liquidity mining for YIELD token by following this detailed guide.
What differentiates yield-farming.io from the rest of the peers in this space, is the listing of some ‘experimental’ pairs which are basically lower-cap coins but have a massive potential. The Yield-Farming platform provides fuel and traction to such newly launched projects and helps them improve their liquidity numbers.
Each of the listed pool pairs on the platform also mentions the Total Value Locked (TVL) that highlights the overall health of the DeFi. The TVL can be measured in BTC, ETH or even USD. The higher value of TVL suggests the more yield-farming going on.
Understanding the Working of Yield-Farming
Yield Farming basically involves two major players – Liquidity Providers (LPs) and Liquidity pools and is closely associated with a model dubbed as the Automated Market Maker (AMM).
Just as the LPs are responsible for providing funds to the liquidity pools that powers a marketplace wherein users can lend, borrow, or exchange the tokens. Using these platforms incurs fees that are given in the form of rewards to the liquidity providers depending on their share to the liquidity pools.
Besides, many of the yield-farming platforms have been competing in terms of the added benefits they have to offer. This could include the distribution of additional governance tokens, the popular trend started by the Compound Finance ecosystem with its COMP tokens.