Decentralized finance (DeFi) has ballooned into a booming industry that demonstrates some of the efficient and creative possibilities of the crypto industry. Tens of billions of dollars in crypto assets today are locked in DeFi, a significant increase from 2021. One reason it continues to grow is the appeal of “yield farming,” a strategy that leverages crypto assets and helps users maximize their returns. The strategy allows crypto investors to maximize their cryptocurrency rewards across multiple DeFi platforms through different strategies shared below. Yield farming creates an intriguing opportunity, but also involves complex strategies and a keen eye. There is also a significant risk of losing your principal capital if you’re not careful. The concept of yield farming gained prominence in the summer of 2020 after the Ethereum (ETH)-based credit market, Compound, began distributing governance tokens, known as COMP, to its users. The governance tokens gave voting rights to holders on proposed platform changes. The increased demand for the COMP token — triggered by its automated distribution — led to the beginning of the DeFi yield craze.
Full story : Decentralized Finance: How DeFi Yields Are Generated.