Yield Farming: Harvesting Alpha In The DeFi Fields
Yield farming, a hot topic in the decentralized finance (DeFi) world, allows users to earn rewards with their cryptocurrency holdings. It’s like putting your Crypto to work, earning passive income simply by locking up your assets in various DeFi protocols. But beneath the potential for high returns lies complexity and risk. This guide delves deep into yield farming, exploring its mechanisms, strategies, risks, and potential future.
What is Yield Farming?
The Basics of DeFi Yield Farming
Yield farming, also known as liquidity mining, is a process where users provide liquidity to DeFi platforms and earn rewards in return. These platforms typically use decentralized exchanges (DEXs), lending protocols, or other DeFi applications. By depositing your crypto, you contribute to the platform's liq...