Wrapping up a successful private funding round, Don-Key is gearing up to introduce a platform to bring together liquidity providers and yield farmers, incentivizing participants to work together and share the benefits.

New Platform Brings eToro’s Social Element To DeFi

Decentralized finance (DeFi) and yield farming are two of the hottest areas in cryptocurrency today. After the DeFi ecosystem’s total value locked (TVL) crossed $4 billion in early 2020, yield farming was introduced to maximize the rate of return on capital by leveraging several protocols.

Yield farming consists of several complicated strategies and isn’t another get-rich cryptocurrency scheme. It involves lending crypto holdings using smart contracts. In return for this, lenders earn fees. Although straightforward in principle, yield farming is a risky pursuit that demands constant attention, whether moving holdings between different marketplaces to maximize returns, tracking the continually changing APYs, and frequently optimizing strategies.

In most cases, yield farming works with liquidity providers (LPs) that add funds to liquidity pools. These pools contain funds locked in smart contracts, and in return for providing liquidity to the pools, the LPs are rewarded, usually with fees generated by the underlying DeFi platform. However, the biggest obstacle is that most users belonging to these two distinct groups don’t possess the skills to create strategies for holding a low volume of funds for a consistent yield.