What Is “Yield Farming” in DeFi?
Yield Farming is the practice of staking or lending crypto assets in various DeFi protocols to generate the highest possible returns (yields). Farmers move their assets between different protocols to chase the best opportunities, which can involve earning trading fees, interest, or governance tokens (liquidity mining).
It is a high-risk, high-reward activity.
Glossar
Governance Tokens
Delegation ⎊ Governance tokens facilitate decentralized control over protocol parameters, enabling token holders to propose and vote on changes impacting the system’s functionality and future development.
DeFi Protocols
Protocol ⎊ Decentralized finance protocols represent a paradigm shift in financial infrastructure, leveraging blockchain technology to automate and disintermediate traditional financial services.