Simply put, yield farming is nothing more than putting cryptocurrency assets into use by earning a return on the capital invested in a DeFi market. There are numerous money markets such as Compound, Curve, and Aave. They provide the most straightforward road to earning a yield. For those looking to earn more liquidity pools such as those available on Uniswap can provide more flexibility as they provide better yields but come with increased risk.
Generally speaking yielding allows you to put your idle assets to work, and make passive income, without having to sell.
You might be interested to also see the following guides:
- Introducing Defi Yield
- What is DeFi?
- What are pools?
- What to consider before farming yield?
- What is Total Value Locked (TVL)?
- What Is the Annual Percentage Yield (APY)?
- What is liquidity mining?
- What is composability?
- What is a stablecoin?
- What is a liquidity provider?
- What are wrapped assets?
- What are the potential use cases for DeFi?
- How to avoid getting Rekt with Yield Farming
- Why Are You Miscalculating Your Impermanent Loss And How To Stop Doing It
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