The Ins and Outs of Yield Farming
Yield farming is a way to generate extra income with your crypto assets. Users stake and lend their assets to get big returns in tokens or other forms of crypto. Yield farming is one of the most popular practices in the DeFi world and gives users the chance to earn large returns from small investments. Still a young sector, DeFi continues to be bolstered by this innovative crypto-practice.
Yield Farming and Liquidity Mining
Here’s how it works. Liquidity providers (LPs) freeze or stake their assets in a liquidity pool. Liquidity pools are run by smart contracts which give LPs bonuses for adding funds. The approximate rewards are known as the annual percentage yield (APY).
Liquidity mining is a special kind of yield farming. In liquidity mining, users earn tokens as rewards besides APY. Many yield farms provide liquidity providers with governance tokens as a way to get them to join. Governance tokens let users take part in the platform’s development through voting.
Annual percentage yield is the approximate return an investor receives from their investment. It is calculated, estimated return during a year on one investment. APY varies depending on the asset, platform, and liquidity pool it’s in.
Popular Yield Farming Platforms
Now let’s talk about some popular yield farming platforms. Investors often use several different platforms to reduce risk and maximize returns. Here are three of the most used yield farming platforms.
Uniswap is a popular decentralized exchange and automated market maker. On it users can exchange any ERC20 token pair on Uniswap. LPs stake both tokens in the liquidity pool equally and get a percentage of the transaction fees and a governance token too. Uniswap’s latest version, V3, is an ever-expanding platform with two hundred-plus incorporations.
SushiSwap is an AMM that forked from Uniswap, that is, the developers used Uniswap’s code to create SushiSwap. As for the name, don’t be fooled if it seems unprofessional. SushiSwap has over three billion dollars in liquidity. Users can choose from a range of trading options, like staking, farming, lending, or borrowing to make the most of their crypto assets.
PancakeSwap is also an AMM but it’s on Binace Smart Chain instead of Ethereum. Users can swap BEP20 token pairs in liquidity pools. It has a high TVL (total value locked aka amount of assets being staked) for Binance platforms, with five billion dollars staked as of this year. It’s also attractive for its high APYs.
Yield Farming and Liquidity Pools on Bring Finance
We offer yield farming opportunities on Bring Finance. But instead of liquidity pools, we refer to them as Rings. Our latest Ring includes four tokens: BRNG, YARL, SMG, and WELD. You need to add liquidity on Pancake Swap pools in order to get LP token. Then you can stake LP on bRing and get four tokens as rewards.
Come check out our current liquidity pools on Binance Smart Chain. Visit our website to view APYs and reward details. Stake one token and earn all four.