What is Yield Farming?

Yield farming is a form of staking where you lend your cryptos to generate higher returns by providing liquidity for DeFi protocols.

Just like earning interest in conventional banking, you can earn interest on your cryptocurrency. When you lend your cryptocurrency, you earn interest or fees and you get even more return when the cryptocurrency begins to escalate quickly. You can lend your digital coins with the help of a decentralized app (dapp) such as compound. This app lends the coins to the people who use them for various purposes such as speculation. Interest rates usually vary because of demand of a cryptocurrency.

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