Yield Farming

Yield Farming, also known as Liquidity Mining, refers to the process where users provide their cryptocurrencies to DeFi protocols to earn high yields. The key points are:

• Liquidity Pools: Users provide their cryptocurrencies to liquidity pools utilized by DeFi protocols such as Uniswap, Aave, or Compound.

• Rewards: In return, they receive rewards in the form of additional cryptocurrencies or platform tokens.

• Risks: While yield farming can be highly lucrative, it also carries high risks, including smart contract security vulnerabilities, impermanent loss, and market volatility.