Blockchain enthusiast developer and writer. My telegram: ksshilov
The yield farming space is probably the most confusing piece of the crypto puzzle. At its most basic, it involves locking up ETH, USDT or other types of tokens into a smart contract. The difference lies in the specifics of the smart contract, as well as the number and enthusiasm of participants. The common thread is the possibility to receive passive income, instead of holding onto tokens long-term while hoping for gains!
Yield farming could be a risky endeavour, which can cause almost immediate losses. Still, the inflow of funds into most projects usually means there is a chance for windfall gains. This chance continued to attract new players, and the funds locked in decentralized finance exceeded $14.3B as of November 2020, growing more than 20 times in the past year.
Anyway, the potential gains from yield farming highly depend on which protocol you’re choosing. While most projects attempt to create a long-term value proposition, each with its own risks, it might be hard to study and choose the best for you.
For your help, we picked four leading DeFi projects specializing in yield farming, to show how those