BlockNews
FOLLOW ON X
  • CRYPTO
  • FINANCE
  • POLITICS
  • MEMECOINS
  • NFT
  • TECHNOLOGY
  • OPINION
No Result
View All Result
BlockNews
  • CRYPTO
  • FINANCE
  • POLITICS
  • MEMECOINS
  • NFT
  • TECHNOLOGY
  • OPINION
No Result
View All Result
BlockNews
Home CRYPTO

DeFi Basics: Yield Farming

by BlockNews Team
September 17, 2022
in CRYPTO, DEFI, GUIDES
Reading Time: 3 mins read
A A
1
SHARES
13
VIEWS
Share on XShare in TelegramShare on Reddit

It is no secret that central banks are hardly even considered a severe option when “putting your money to work”. Many are offering diminishing returns for leaving the money with them over the last few years, and investors are looking into other ventures with higher returns. 

One such opportunity is Decentralized Finance, where investors can earn much higher returns than traditional investing. However, it does come with a few risks. Today we will look at Yield Farming and the best (or safest) available options. 

Before we continue, this is not financial advice. It is more for educational purposes. Many of the methods we will discuss could be considered high-risk-high-reward investments. Always do your research. 

In essence, Yield Farming is a process where you try to maximize your returns on investment by utilizing different DeFi protocols. Yield farmers typically measure their returns in annual percentage yields, or “APY” for short. One can expect a yearly return from 3-7% for low-risk approaches and upwards of 120% for high-risk methods. 

These returns can be achieved by deploying your capital into one of the three main categories:

  • Staking. This is the easiest, most popular, and most passive form of yield farming. Many coins and tokens on Layer 1 blockchains offer more or less decent rewards if you lock them into their staking pool for a certain period. This method requires little to no technical knowledge as you only need a cryptocurrency wallet (for example, Metamask or Trust Wallet), and you are a few clicks away. 

This method is so popular that many major centralized exchanges (such as Binance, KuCoin, Kraken, Coinbase, and Gate-io) offer this service on their platforms. Typically, you can choose to stake your tokens anywhere from 7 to 90 days, with your yield increasing with time locked.

 The only risk involved with staking is if the price of the token you invested in is losing its value quicker than the number of tokens you are getting. But if you are investing in a specific cryptocurrency for the long-term and don’t mind the volatility that comes along with it, staking is almost always better than just holding. 

  • Providing Liquidity. This approach is best represented with an example. Let’s say you have $1000 worth of BNB (BSC’s native token) and $1000 worth of BUSD (BSC’s stablecoin) sitting in your wallet. You can find a liquidity pool on a decentralized exchange (such as PancakeSwap) and temporarily lock your assets into it. 

When people trade these two currencies back and forth, you will earn a percentage of trading fees depending on how much Liquidity you provide compared to the pool’s size. It is not uncommon to achieve up to 40% APY by providing Liquidity to specific collections. However, you are running the risk of “Impermanent Loss,” another topic in and of itself. If you want to know more, check out our article on liquidity pools.

  • Lending. Many decentralized services (AAVE, Compound, etc.) offer quite enticing rewards (sometimes up to 25% APY) if you deposit your assets into their protocol, where they lend them to others. 
Tags: BlockchaincryptoWeb3
TweetShareShare
Previous Post

Blockchain Game ChainGuardians brings Fashion into the Metaverse

Next Post

Arbitrum: What is it?

DON'T MISS THESE! HOT OFF THE PRESS

Toncoin and Telegram: The Sleeping Giant of 2025?
BITCOIN

Toncoin and Telegram: The Sleeping Giant of 2025?

July 1, 2025
Crypto Supply Shock: Bitwise Predicts Bullish Runs for BTC, But Shows Doubt With ETH and SOL
BITCOIN

Crypto Supply Shock: Bitwise Predicts Bullish Runs for BTC, But Shows Doubt With ETH and SOL

July 1, 2025
SEC Plans Shortcut for Crypto ETFs With New Listing Rules
CRYPTO

SEC Plans Shortcut for Crypto ETFs With New Listing Rules

July 1, 2025
Connecticut Bans Bitcoin and Crypto for Government Funds
BITCOIN

Connecticut Bans Bitcoin and Crypto for Government Funds

July 1, 2025
Shiba Inu: Turning $3,000 into $10,000 – The Math Behind the Meme
CRYPTO

Shiba Inu: Turning $3,000 into $10,000 – The Math Behind the Meme

July 1, 2025
FARTCOIN Surges 148%—Is the Meme Just the Beginning?
CRYPTO

FARTCOIN Surges 148%—Is the Meme Just the Beginning?

July 1, 2025
Load More

Related News

Toncoin and Telegram: The Sleeping Giant of 2025?

Toncoin and Telegram: The Sleeping Giant of 2025?

July 1, 2025
Crypto Supply Shock: Bitwise Predicts Bullish Runs for BTC, But Shows Doubt With ETH and SOL

Crypto Supply Shock: Bitwise Predicts Bullish Runs for BTC, But Shows Doubt With ETH and SOL

July 1, 2025
SEC Plans Shortcut for Crypto ETFs With New Listing Rules

SEC Plans Shortcut for Crypto ETFs With New Listing Rules

July 1, 2025
Donald Trump Threatens Elon Musk with DOGE Audit

Donald Trump Threatens Elon Musk with DOGE Audit

July 1, 2025
Jerome Powell Says July May be Too Early for Rate Cuts, But Doesn’t Rule it Out

Jerome Powell Says July May be Too Early for Rate Cuts, But Doesn’t Rule it Out

July 1, 2025
Twitter Telegram Threads

BLOCKNEWS.COM

BlockNews

BlockNews.com is your premier source for real-time cryptocurrency, blockchain, and financial market news.

Our mission is to deliver accurate, timely, and insightful information to help both seasoned investors and newcomers navigate the evolving digital economy.

With in-depth analysis, exclusive insights, and up-to-date news, BlockNews.com keeps you informed on the latest trends in crypto, DeFi, NFTs, tech, and beyond.

Stay ahead of the herd with BlockNews.com

RESOURCES

  • About
  • Contact Us
  • Terms and Conditions
  • Privacy Policy

POPULAR TOPICS

$ADA $XRP AI Avalanche Binance Bitcoin Bitcoin ETF blackrock Blockchain BTC Business Cardano Chainlink China Coinbase Coinglass crypto cryptocurrency Crypto Exchange Crypto Regulation DeFi Dogecoin Donald Trump Elon Musk ETF eth ethereum Federal Reserve FTX grayscale Memecoin metaverse Microstrategy NFT NFTs PEPE ripple sec Shiba Inu Solana Stablecoin Technology US Web3 xrp

GET QUICKER UPDATES ON X

© 2022-2025 BlockNews.com - Crypto and NFT news website by Aiur Labs.

No Result
View All Result
  • HOME
  • CRYPTO
  • MEMECOINS
  • TECHNOLOGY
  • POLITICS
  • FINANCE
  • NFT
  • DEFI
  • GUIDES

© 2022-2025 BlockNews.com - Crypto and NFT news website by Aiur Labs.