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What is DeFi Yield Farming?

In Crypto Globe, the mechanism through which one can earn more cryptocurrencies using cryptocurrencies is known as Yield Farming or Liquidity Mining. This is the process that lets you earn crypto rewards by staking your cryptos on your cryptocurrency wallet.

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What is DeFi Yield Farming?

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  1. What is DeFi Yield Farming ?

  2. What is Yield Farming? In Crypto Globe, the mechanism through which one can earn more cryptocurrencies using cryptocurrencies is known as Yield Farming or Liquidity Mining. This is the process that lets you earn crypto rewards by staking your cryptos on your cryptocurrency wallet. Yield Farming is similar to the concept of Cryptocurrency Staking, which provides rewards for your crypto capital investments.

  3. What is DeFi Yield Farming? Decentralized Finance, shortly termed as DeFi is an open-source protocol that provides permissionless and fast financial services. The process by which users provide liquidity to DeFi open-source protocols and get rewards is termed as DeFi Yield Farming. In simple terms, the process of yield farming carried out on platforms that are built using DeFi protocols offers native DeFi tokens of that particular platform and this process is known as DeFi Yield Farming.

  4. What are Liquidity Pools? Liquidity Pools are smart contracts that lock up tokens or assets to facilitate trading by providing high liquidity. Liquidity Pools also are known as pools of tokens or pools of assets offers users better returns as compared to money markets but involves certain risks.

  5. How does Yield farming work? First and foremost, the liquidity providers deposit or send their assets or funds to the liquidity pool. This liquidity pool provides a marketplace where users or LPs can lend, borrow or exchange their tokens or assets. These platforms collect fees which are then paid back to the liquidity providers based on their share of the liquidity pool. This is how a yield farming process takes place on any platform. However, working can vary with different technologies and approaches. The funds deposited are mostly stablecoins pegged to USD. DAI, USDT, BUSD are the most commonly used stablecoins in DeFi yield farming.

  6. How are returns calculated in DeFi yield farming? Annual Percentage Yield (APY) The annual rate of return charged on borrowers and paid to providers subsequently refers to Annual Percentage Yield. Annual Percentage Rate (APR) The annual rate of return imposed on borrowers and paid to the investors is termed as Annual Percentage Rate. Since APR and APY come from legacy markets, DeFi should find its own metrics for the calculation of returns in yield farming.

  7. What is the future of DeFi Yield Farming? The above-listed DeFi Yield farming provides better yields for their farmers which makes uncountable new users to those platforms each day. This process of Yield Farming is driving the DeFi space to the next level in the crypto market. In the future, there may be more and more DeFi based platforms inherited with automated yield farming that will tend to rock the crypto globe. This yield farming has inspired many individuals and yet to attract many in the nearer future.

  8. Who we are ? We Bitdeal - Leading DeFi Yield Farming Platform Development Company offers the best DeFi-based yield farming development services across all borders. By deeply understanding the purport of DeFi and Yield Farming in the future, our experts started providing the best solutions to launch your own new DeFi yield farming like Compound, Yearn.Finance, Aave, and more or integrate DeFi based yield farming protocols in your existing platform. If you still have doubts about how this Yield farming can help you in making more money, feel free to catch our experts anytime. They are always ready to clear all your business related queries.

  9. Contact Us We Bitdeal - Leading DeFi Development Company offers the best defi development services. Whatsapp : +91 9677555651

  10. Know more About DeFi Yield Farming here ! What Is DeFi Yield Farming ? - A Complete Beginners Guide

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