Introduction of DeFi technology is one of the most forefront of innovation in the blockchain space.DeFi that money is largely provided by strangers on the internet. That's why decentralized banking applications come up with clever ways to attract financers, holders and investor to look back to DeFi.
DeFi enlarges a another great advantage is DeFi Yield Farming. Which is one of the hot new term in crypto. DeFi Yield Farming.
Yield Farming is Rocket Fuel of DeFi, and it surely has received a lot of attention this year.
Wanna build your ROI in DeFi Yield Farming using various popular protocols and defi platforms ?
Coinjoker DeFi Development Company offers popular ever demanded yield farming development solutions with Dapp and smartcontract embedded solutions to generate passive income in short duration of time in secure way.
For those who are fresher to the concept of DeFi yield farming and have been knowing it mentioned quite a lot lately but still do not know what it is yet, here the blog compelety describes the DeFi Yield Farming and everything about it.
What is DeFi Yield Farming?
Yield Farming - Latest Hype Bubble in DeFi and blockchain
Yield Farming is the process of putting their crypto tokens like liquidity to protocol in a decentralized finance (DeFi) market to earn interest or form of fees or incentives. Yield Farming takes place on the Ethereum blockchain, it is a way to earn passive income on Ethereum.
Key Points of DeFi Yield Farming:
1. Yield farming is the way of gaining a return on capital by initiate it for productive use
2. Money markets offer the easiest way to gain reliable yields on your crypto
3. Liquidity pools have better gain than money markets, and anlayze to avoid the market risk.
4. Incentive schemes can sweeten the deal, giving yield farmers an added reward and bonus.
How does Yield Farming work?
There is a common protocol, which is used to exchange diverse cryptocurrencies by each and every user. However, the successful execution of trades, the protocol will expect liquidity. But, there is no assets in protocol, people are hesitate to trade with protocol for low trading volume with less interest.
To Gain liquidity in that protocol, the traditional market use this technique, you pay a fee to hedge funds and other market makers to get this liquidity. But in DeFi, you can revolutnize this system by offering anyone to provide liquidity to the protocol which will be a return of a value token and/or interest and/or fee.
Our DeFi Dapp & Smartcontract Development for Yield Farming:
Our DApps run on a smart contract blockchain and offer all the benefits of a peer-to-peer network.Coinjoker's DeFi dapps are characterized by speed, efficiency, and the security of heavy encryption for your yield farming implementation.
We use inbuilt and customized smart contracts (as per your requirements) to execute transactions in the blink of an eye, triggering instantly, as soon as pre-set conditions are met. Using our open-source code, they are totally transparent, publishing transactions on the network, you can identify Our DeFi Dapp and Smartcontract service with the best rates and confirm the state of their reserves.
Most of these protocols go through proper smart contract audits. security audits does eliminate risks completely.
Total Value Locked(TVL) - DeFi Yield Farming
Total Value Locked is abbreviated as (TVL). It shows the amount of cryptocurrencies are locked in DeFi lending and various types of money marketplaces.
TVL is represents liquidity in liquidity pools. Its helpful index to measure the volume of the DeFi and yield farming market as a whole. Its also acts an effective thing to check the “market share” of different DeFi protocols.
What is Liquidity Pool in DeFi Yield Farming?
Liquidity pool is basically a smartcontract that contains funds. Some liquidity pools pay their rewards in multiple tokens. Those reward tokens then may be deposited to other liquidity pools to earn rewards there, and so on
Yield farming is typically done using ERC-20 token on Ethereum, and the rewards are usually also a type of ERC-20 token.
How DeFi Yield farming returns are calculated?
DeFi estimated yield farming returns are calculated annualized.
Some commonly used metrics are Annual Percentage Rate (APR) and Annual Percentage Yield (APY).
Annual Percentage Rate (APR)- Annual Percentage Rate doesn’t take into account the effect of compounding (means directly reinvesting profits to generate more returns)
Annual Percentage Yield (APY)- Annual Percentage yield does take into account the effect of compounding (means directly reinvesting profits to generate more returns)
Yield Farming Platforms and Protocols:
We built yield farming platform and protocols to earn the rewards. DeFi Yield farming strategies may even change by the hour. Each platform has it own rules. Before you get started every thing you to need above it. For that, You shoulf proceed with the familiar decentralized liquidity protocols.
Compound Fianance is one of the core protocols of the yield farming ecosystem.
Compound is an algorithmic money market that allows users to lend and borrow assets. With an Ethereum wallet anyone can supply assets to Compound’s liquidity pool and earn rewards.
Maker is a decentralized credit platform that supports the creation of DAI. You can open a Maker Vault where they lock collateral assets, such as ETH, BAT, USDC, or WBTC.
Yield farmers may use Maker to mint DAI to use in yield farming strategies.
Synthetix is a synthetic asset protocol. It allows anyone to lock up (stake) Synthetix Network Token (SNX). Synthetix may allow all sorts of assets to be used for yield farming in the future.
Aave is a decentralized protocol for lending and borrowing. Interest rates are adjusted algorithmically, based on current market conditions. Aave is heavily used by yield farmers.
Uniswap is a decentralized exchange (DEX) protocol that allows for trustless token swaps. Uniswap has been one of the most popular platforms for trustless token swaps due to its frictionless nature. This can come in handy for yield farming strategies.
Curve Finance is a decentralized exchange protocol specifically designed for efficient stablecoin swaps. Curve allows users to make high-value stablecoin swaps with relatively low slippage.
Balancer is a liquidity protocol similar to Uniswap and Curve. It allows for custom token allocations in a liquidity pool. It allows liquidity providers to create custom Balancer pools. Balancer is an important innovation for yield farming strategies.
Yearn.finance is a decentralized ecosystem of aggregators for lending services such as Aave, Compound, and others. It aims to optimize token lending by algorithmically finding the most profitable lending services.
DeFi Tokens For Yield Farming
DeFi tokens create new and unique ways to gain access to promising opportunities in a permissionless fashion.
New protocols explore different forms of tokenization, it’s likely that the opportunities for end-users to capture in the upside of the most popular DeFi products will only become more and more accessible
DeFi Tokens are
- yEarn – YFI
- Uniswap – UNI
- Compound – COMP
- Synthetix – SNX
- Aave – LEND
- Kyber Network – KNC
- Maker – MKR
- 0x Protocol – ZRX
- Balancer – BAL
- UMA – UMA
- Curve – CRV
- Ren Protocol – REN
- Nexus Mutual – NXM
- Bancor – BNT
- Numerai – NMR
- bZx – BZRX
- mStable – MTA
- Loopring – LRC
- Mainframe – MFT
- Akropolis – ADEL
DeFi Yield Farming 2020 and Onwards
Yield Farming has just started but the amount of opportunities it presents to traders to earn interest on their capital is never-ending. Its popularity is all set to skyrocket in a few months to come.
Yield Farming makes a lot of sense to users in the fact that:
1. Most all digital assets and tokens are kept on exchanges doing nothing when they could be in DeFi yeilding it earning interest.
2. The respective decentralized exchanges (DEXs) have spreads that are competitive and offer higher lending rates than centralized exchanges.
3. Yield farming is an attractive and exciting new development for both lenders and borrowers, and will definitely be getting more attention (a lot more) this year.
Coinjoker - DeFi Yield Farming Development Company
Coinjoker delivers DeFi yield farming development services as a lucrative, fast, and transparent for your investment opportunity on a platform which is secured by a combination of our blockchain developers oversight and our powerful technological safeguards.
Our DeFi yield farming development services is noted for high transparency, speed, efficiency, and incredible returns, while offering regulatory protection, enhanced security.