NAMA Finance — Yield Farming 101
Welcome folks to another week 🔥🔥🔥
In the last story NAMA Finance — How The Loan Works, we mentioned there are 3 types of user roles in the NAMA Protocol world:
- Borrower
- Lender
- Liquidity Provider
As promised, this story will dive deep into Yield Farming and the 3rd role above: Liquidity Provider.
What is Liquidity Provider 💧💧:
Liquidity providers are users who can deposit equal values of ETH and ERC-20 tokens to the liquidity pool in a decentralized exchange like Uniswap, and earn passive income on their deposit.
What is Yield Farming in the DeFi world 🌾🌾:
Yield Farming, also known as “Liquidity Mining”, is a popular thing in the DeFi land.
It is neither the business of growing crops and raising livestock nor mining gold with a digger.
It is the activity of providing your crypto assets as liquidity to the protocol, to obtain an interest/capital in a proactive way.
In a simple word using our NAMA example: deposit crypto assets (stablecoins, LP tokens, or even NAMA), and get NAMA token incentivization.
It is very popular these days to be a Liquidity Provider and do yield farming, actually it is a big business already. You may have heard those big names like Compound, Aave, Balancer, Curve, etc. They are all famous Protocols where you can do yield farming and they are all booming fast.
Yield Farming at NAMA Protocol ✨✨:
❔: What kind of crypto assets can Liquidity Provider deposit to NAMA protocol?
🙋: In NAMA Protocol, the Liquidity Provider can deposit 3 types of assets: stable coins, NAMA tokens, or ETH-NAMA pair LP tokens.
❔: What’s the difference between depositing stable coins, NAMA token, and ETH-NAMA token pairs?
🙋: They will have different incentives depending on different individual Liquidity Providers, also they have different APR.
❔: What do I get from Yield Farming?
🙋: Liquidity Provider gets NAMA token as rewards.
❔: How much incentivization do I get from Yield Farming?
🙋: It depends on what you deposit, how much you deposit as well as how long you keep the deposit in the pool.
❔: What kind of stable coins does the NAMA protocol support?
🙋: USDC, USDT, DAI would be the initial support ones. The community can decide what’s more to support in the future.
❔: How can I redeem my deposit?
🙋: Redeem at NAMA Protocol is nothing much different than any other Protocols like Compound, or Aave. It just follows the standard approach.
How is the NAMA token used in the NAMA Finance universe 💲💲:
NAMA token can be used for NAMA Community governance, which we will explain in more detail in later articles 😉.
Conclusion ✔️✔️:
In this story, we just briefly described how Yield Farming works in NAMA protocol, hope that all makes sense to you 👏👏.
For more information and details please join our Telegram community and Twitter for more happy discussions.
We will launch our application in the testing network soon, and explain more details in a real demo in the near future, please stay tuned!
