How Does 'Yield Farming' Relate to the Concept of a Liquidity Pool? ⎊ Path

How Does ‘Yield Farming’ Relate to the Concept of a Liquidity Pool?

Yield farming is the practice of leveraging assets in a liquidity pool to earn additional rewards beyond the standard trading fees. LPs deposit their tokens into a pool, receive LP tokens, and then often stake these LP tokens in a separate protocol.

This staking earns them governance tokens or other cryptocurrencies as a secondary incentive, effectively "farming" yield on their provided liquidity.

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What Is ‘Yield Farming’ in the Context of DeFi?

What Is the Difference between Staking and Yield Farming?

What Are the Most Common Automated Strategies for Yield Farming a DAO’s Treasury Assets?

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What Is a Liquidity Pool (LP) and How Is It Used in Yield Farming?

What Is a ‘Yield Farm’ in the Context of DeFi?

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