If you are interested in Defi, perhaps you have searched on Google a couple of times to have Yield farming explained to you. However, if you have just set your foot into this lucrative way of seeking profits with cryptocurrency or still find yourself grasping just a vague idea of Yield farming. Please read through the article below to learn more about it.

What is Yield Farming?

Yield Farming is a strategy applied in Decentralized Finance (DeFi) for ones that are actively finding ways to bring in profits and rewards. It’s when a user puts their cryptocurrency in a contract controlled and regulated by DeFi’s and this allows other users to come to this pool to borrow, lend, making stakes with the cryptocurrency.

Consideringly, Yield Farming seems very appealing to people at both ends. Especially for people who want to do something with the money sitting idle in their wallets. The deposit promises a passive flow of profit to fund owners. Moreover, this also helps to provide opportunities to users still seeking tokens for marginal tradings.

Familiar terms

To begin with, you need to have basic knowledge of how Yield Farming works and get the hang of information about all parties involved in the process of smart contracts. 

  • Liquidity provider: The provider of funds that deposits cryptocurrency in the cryptocurrency pool and the projects.
  • Liquidity pool: the smart contract that stands between the Liquidity provider and the Yield Farming project. 

The smart contract has the function to control everything since you put