Yield Farming

Yield farming is a Decentralized Finance (DeFi) strategy where users lend or stake their Cryptocurrency Assets in order to earn Returns or interest on their investments. This is typically done through Smart Contracts on Blockchain networks, where users can provide Liquidity to various protocols in exchange for rewards, often in the form of additional tokens.

Examples

• Uniswap: Users can provide Liquidity by depositing tokens into a Liquidity pool and earn a Share of the trading fees generated by the pool.
• Aave: By lending Assets to Aave’s platform, users can earn interest on their deposits, while also bEINg eligible for governance tokens as rewards.

Cases

• Liquidity-mining/">Liquidity Mining: Users earn tokens as rewards for providing Liquidity to a protocol, which can then be staked for additional rewards.
• Staking: Users lock up their tokens in a protocol to support its operations and, in return, earn a yield on their staked Assets.