Staking & Farming: Everything you need to know
The world of decentralized finance (DeFi) has shown new ways to earn passive income available to crypto investors. These are Yield Farming and Staking.
In this article, we will go through everything you need to know about Yield Farming and Staking.
Yield Farming
Yield farming is known for being the most popular of all the passive income methods that monetizes holding crypto-assets. It allows crypto-asset holders to deposit tokens in a liquidity pool and earn interest percentages from it.
In other words, Yield Farming allows crypto investors to lock crypto-assets into a liquidity pool where these crypto-assets are made available to other users of the same protocol.
Yield Farmers’ contribution in maintaining the liquidity of crypto assets on decentralized exchanges (DEX) is largely substantial. This results in these farmers being awarded an Annual Percentage Yield (APY). It is thanks to DeFi protocols like Compound (COMP) and AAVE that Yield Farming has been introduced to the large crypto audience.
Yield farming is based on Automated Market Makers (AMM) that replaces the old order book of the traditional financial space.
AMMs are smart contracts that facilitate the trading of digital assets using mathematical algorithms. Their advantage lies in the absence of a counterparty for each transaction carried out, making their job to ensure a certain stability of the liquidity.
Staking
Staking refers to the pledging of your crypto-assets as collateral for blockchain networks that are using the Proof-of-Stake (PoS) consensus algorithm. Similarly to how miners facilitate the achievement of consensus in Proof of Work blockchains, stakers have the mission of validating transactions on PoS blockchains.
Staking promotes the chain distribution of earnings, which means that generally the validation of a block leads to the issuance and distribution of tokens as staking rewards.
Compared to mining, staking seems to favor the consensus. It does not require any user to invest in expensive equipment in order to generate the computing power required for mining.
ClubRare DeFi
ClubRare DeFi is the foundation of the ClubRare economic system that contributes to the ClubRare Universe Ecosystem through continuous updates.
ClubRare Universe is an ecosystem that ClubRare builds with our community members to create a collector-centered world.
Each sub-product of ClubRare has a reward system that encourages the active participation of the community. Community members can earn rewards through various activities based on their personal interests.
Through the economic scale created by the active participation of the community, ClubRare Universe’s economic system will continue to expand and evolve.
With this, ClubRare aims to create a future where the ‘Collectors’ in the ClubRare Universe become an occupation. ClubRare is a community collaborating with these collectors.
Single Token Staking using Fixed APY (Annual Percentage Yield)
- ClubRare Governance Token (AGOV)
Est.APR : 11.34%, APY (Compounded daily) : 12%*
- ClubRare Utility Token (MPWR)
Est.APR : 26.25%, APY (Compounded daily) : 30%*
*As of March 1, 2022
Lock-up Staking
Lock-Up Staking provides a Lock-Up system and a higher APY (Annual Percentage Yield) depending on the lock-up period. However, Variable Staking can provide flexible APY (Annual Percentage Yield) according to community opinions and TVL (Total Value Locked).
ClubRare DeFi users can change Fixed Staking to Variable Staking at their discretion at the time of the launch of Variable Staking.
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