Organic farming

Yield farming in DeFi provides liquidity to earn interest and token rewards

Yield farming is a financial strategy in the decentralized finance (DeFi) sector that involves providing liquidity to earn interest and token rewards. Participants lend their cryptocurrency assets to liquidity pools, which are collections of different crypto assets. In return, they receive rewards in the form of additional tokens or interest payments.

Example

Alice lends her Ethereum (ETH) to a DeFi platform's liquidity pool. In return, she receives a share of the pool's rewards, which may include additional ETH or other DeFi tokens.

Remember this

Yield farming allows investors to potentially earn passive income by participating in the liquidity provision of DeFi platforms.

Text adapted from Wikipedia, licensed under CC BY-SA 4.0.

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Educational content, not financial advice.

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