What is Yield Farming?

Yield farming is a relatively new concept within the Decentralized Finance (DeFi) ecosystem. Yield farming means that users use their Crypto assets to make as much profit as possible by becoming a liquidity provider at DeFi

Yield farming, also referred to as liquidity mining, is a way to generate rewards with cryptocurrency holdings. In simple terms, it means locking up cryptocurrencies and getting rewards.

In some sense, yield farming can be paralleled with staking. However, there’s a lot of complexity going on in the background. In many cases, it works with users called liquidity providers (LP) that add funds to liquidity pools.