Farming or Yield Farming to be exact is an act of putting your crypto assets to work to generate more crypto.

What is crypto yield farming. Yearn Finance with the symbol YFI has a supply of 30000. Yield farming is the act of putting your money into decentralized finance DeFi applications as a liquid provider to earn interest fees or other rewards. What Is Yield Farming.

What are the best yield farming cryptocurrencies. What is yield farming. On most platforms users deposit their assets in a liquidity pool or stake their assets via a smart contract.

More specifically its a process that lets you earn either fixed or variable interest by investing crypto in a DeFi market. The core idea of yield farming is generating passive income with your existing crypto. Though the mechanics can be complicated yield farming is in essence quite simple.

Yield farming gets its name from the fact that investors move their assets from platform to platform to seeking the highest yield. This can be done by leveraging different Decentralized Finance DeFi products and protocols to earn a yield or say a return on your invested asset. Impermanent loss smart contract risks and liquidation risks are a major concern to be accounted for.

DeFi applications offer services that you would typically find in a bank and other financial institutions. Yield farming is a practice allowing yield farmers to earn rewards by staking ERC-20 tokens and stablecoins in exchange to support the DeFi ecosystem. Many of them are now flocking towards yield farming.

What is yield farming in cryptocurrencies. It is also attracting many new users to the world of DeFi. In a way it means locking up cryptocurrencies and get rewards for them.