Yield farming is a decentralized finance strategy where users supply liquidity to various protocols in exchange for rewards. By depositing their digital assets into liquidity pools, investors earn interest, fees, or additional tokens based on the platform’s performance.
This method allows users to maximize the utility of their cryptocurrencies by actively participating in the ecosystem.
While yield farming offers high potential returns, it also carries risks such as impermanent loss and market volatility.
« Back to Glossary Index