Liquidity Lego: Building A Better Farm Yield.
Yield farming, the hottest trend in decentralized finance (DeFi), has revolutionized how cryptocurrency holders earn rewards. By providing liquidity to DeFi platforms, users can earn passive income, sometimes at impressive annual percentage yields (APYs). This guide dives deep into yield farming, exploring its mechanisms, risks, and potential rewards.
What is Yield Farming?
Understanding the Basics
Yield farming, also known as liquidity mining, is a process where users lock up their cryptocurrency holdings in exchange for rewards. These rewards typically come in the form of additional cryptocurrency or tokens. The core concept involves providing liquidity to decentralized exchanges (DEXs) and other DeFi platforms. Think of it as earning interest on your crypto, but often with much higher r...