What Is Yield Farming in Cryptocurrency?
                     WHAT IS YIELD FARMING IN 
CRYPTOCURRENCY?
INTRODUCTION
Yield farming is a method of earning 
rewards or interest by depositing 
your cryptocurrency into a pool with 
other users. 
Source: www.thebalancemoney.com
CRYPTOCURRENCY 
LENDING
The pooled funds are used to carry 
out smart contracts such as 
cryptocurrency lending that 
generates interest in return.
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PROVIDE HIGH INTEREST 
RATES
For investors prioritizing aggressive 
returns, yield farms may provide high 
interest rates, including more than 
100%.
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RISK
Participating in yield farms entails 
assuming a risk of losing your entire 
investment.
Source: www.thebalancemoney.com
HOW YIELD FARMING 
WORKS?
In many ways, yield farming works 
like a savings account, where you 
deposit money with a bank, which 
then pools depositor money and 
lends it forward while you earn 
interest on the funds you deposited. 
Source: www.thebalancemoney.com
LIQUIDITY POOL IS 
CREATED
The first step in yield farming is 
creating a liquidity pool. This relies 
on a smart contract that facilitates all 
investing and borrowing for that 
specific yield farm.
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INVESTORS DEPOSIT 
ASSETS
Investors can connect their digital 
wallets to deposit currency in the 
liquidity pool. This is sometimes 
referred to as “staking.” This is 
somewhat similar to customers 
making a deposit in a bank or 
investing in a mutual fund or ETF.
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SMART CONTRACT 
ENABLES BORROWING
The smart contract can facilitate 
several processes, including adding 
liquidity for a cryptocurrency 
exchange market, or lending to 
others.
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REWARD PAYOUT
Interest, bonuses, and rewards may 
vary by yield farm. You may be paid 
at regular intervals or on a specific 
future date.
Source: www.thebalancemoney.com
THANK YOU