autofarm.network
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  • πŸ“–HOW-TOS
    • Bridge assets
      • Multiple Chain-bridging options
      • Using AnySwap to bridge AUTO
      • To BNB Chain (BNB)
        • Bridge assets from ETH > Binance Smart Chain (BSC)
      • To Cronos (CRO)
      • To Moonriver (MOVR)
        • (Anyswap) Bridge from BSC > MOVR
        • (Solarbeam) Bridge from BSC > MOVR
        • (SushiSwap) Using Passport Meter Multi-Chain Bridge
      • To Fantom (FTM)
        • Bridge assets from Binance CEX to Fantom (FTM)
        • (xPollinate) Bridge assets from BSC > Fantom
      • To Harmony (ONE)
        • Bridge assets from Binance CEX to Harmony (ONE)
        • (Harmony One Bridge) Bridge from BSC or ETH > Harmony
      • To OKEx Chain (OKT)
        • From multiple chains to OKEx Chain
      • To Oasis Protocol (ROSE)
      • To Avalanche Network (AVAX)
        • Bridge assets from Binance CEX to AVAX (C-chain)
        • Bridge assets from ETH to AVAX
        • Bridge $AVAX from X-chain to C-chain
      • To Celo Chain (CELO)
        • Bridge assets from Binance CEX to Celo Chain
        • (Optics) Bridge assets from Polygon > Celo
      • To xDai chain (xDai)
        • (xDai Omni bridge) Bridge assets from BSC and ETH > xDai
        • (xPollinate) Bridge assets from BSC > xDai
      • To Polygon Chain (MATIC)
        • Bridge assets from ETH > Polygon Chain (MATIC)
        • Bridge assets from BSC > Polygon Chain (MATIC)
        • (Orbitchain.io) Bridge assets from BSC > Polygon
        • (xPollinate) Bridge assets from BSC > Polygon
        • (OKEx) Bridge assets to Polygon
      • To Klaytn Chain (KLAY)
        • (Orbitchain.io) Bridge assets from BSC > Klaytn
      • To BOBA L2
        • (BobaBridge) Bridge assets from ETH > BOBA L2
      • To Velas Chain (VLX)
        • (Swapz) Bridge assets from BSC, Polygon and ETH > Velas
        • (VelasPad) Bridge assets from BSC > Velas
      • To Huobi ECO Chain (HECO)
        • (TokenPocket) Bridge assets from BSC > Huobi ECO Chain (HECO)
    • DeFi (Decentralized Finance)
      • Beginner Guides
        • DeFi - Beginners Guide
        • Liquidity Mining & Yield Farming - Beginners Guide
        • Liquidity Pools - Beginners Guide
      • How to Speed Up or Cancel a Pending Transaction
      • Switching Networks on Metamask
    • Autofarm
      • Deposit $AUTO in the Single AUTO Vault
      • Withdraw from Autofarm vaults using a block explorer
      • Access deprecated autofarm vaults
      • Buy insurance cover with Soteria
      • Buy insurance cover with InsurAce
      • Purchase CertiKShield protection for Autofarm
    • Use Autofarm in different chains
      • Aurora Chain (NEAR)
        • Metamask: Add Aurora Chain (NEAR)
      • Avalanche Network (AVAX)
        • Metamask: Add Avalanche Network (AVAX)
        • TraderJoe
          • Provide Liquidity + Vaults
        • Pangolin
          • Provide liquidity + vaults
      • BNB Chain (BNB)
        • How to Get Started with Binance Smart Chain (BSC)
        • Metamask: Add Binance Smart Chain (BSC) Network
        • Pancakeswap (PCS)
          • Provide Liquidity (PCS) + Vaults
          • Provide Liquidity (PCS) + Vaults with SafePal
          • Pancakeswap LP Migration
        • Alpaca Finance
          • Lending (ibTokens) + Vaults
          • Withdrawing + Unlending (ibTokens)
        • MDEX
          • Provide Liquidity (MDEX) + Vaults
        • Belt.fi
          • Provide Liquidity (4BELT - BLP) + Vaults
          • Provide Liquidity (beltToken) + Vaults
        • Video Guides
          • Video Guide: Review of Autofarm
          • Video Guide: Binance Bridge, MetaMask & Autofarm Yield Farming
      • Boba Network (ETH L2)
        • Metamask: Add BOBA L2
        • Provide Liquidity for OolongSwap
      • Celo Chain (CELO)
        • Metamask: Add Celo Chain (CELO)
        • SushiSwap
          • Using SushiSwap vaults on Autofarm
      • Cronos Chain (CRO)
        • Metamask: Add CronosChain (CRO)
        • Cronos Zero-Fee Stablecoin Conversions
        • VVS Finance
          • Provide Liquidity for Autofarm (VVS) vaults - QuickGuide
          • Remove Liquidity from Autofarm (VVS) vaults - QuickGuide
      • Fantom (FTM)
        • Metamask: Add Fantom (FTM)
        • Scream
          • Using Scream vaults on autofarm
      • Harmony Chain (ONE)
        • Metamask: Add Harmony Chain (ONE)
      • Huobi ECO Chain (HECO)
        • Metamask: Add Huobi ECO Chain (HECO) Network
        • MDEX
          • Provide Liquidity (MDEX) + Vaults
          • Provide Liquidity (MDEX) + Vaults with TokenPocket
      • Moonriver (MOVR)
        • Metamask: Add Moonriver (MOVR) Network
        • Solarbeam
          • Provide Liquidity for Autofarm (Solarbeam) vaults - QuickGuide
          • Remove Liquidity from Autofarm (Solarbeam) vaults - QuickGuide
          • Provide Liquidity on Solarbeam + deposit in Autofarm vaults
      • Oasis Protocol (ROSE)
        • Metamask: Add Oasis Protocol (ROSE) Network
      • OKEx Chain (OEC)
        • Metamask: Add Okex Chain (OEC)
        • Cherryswap
          • Provide Liquidity for Autofarm (Cherryswap) vaults - QuickGuide
          • Remove Liquidity from Autofarm (Cherryswap) vaults - QuickGuide
      • Polygon Chain (MATIC)
        • Metamask: Add Polygon (Matic Network)
        • $MATIC Faucet for gas fee
        • Quickswap
          • Provide Liquidity (Quickswap)
        • Sushiswap
          • Provide Liquidity (Sushiswap)
        • Curve.fi
          • Provide Liquidity (3LP - curve.fi) + Vaults
          • Remove Liquidity (3LP - curve.fi)
        • Comethswap
          • Provide Liquidity (Comethswap)
      • Velas Chain (VLX)
        • Metamask: Add Velas Chain (VLX)
        • Deposit to Autofarm Velas vaults - QuickGuide
      • xDai Chain (xDai)
        • Metamask: Add xDai Chain (xDai)
        • $xDAI Faucet for gas fee
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  • What is liquidity mining?
  • What Is Yield Farming?
  • Useful articles:
  • Videos about Liquidity Mining & Yield Farming:

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  1. HOW-TOS
  2. DeFi (Decentralized Finance)
  3. Beginner Guides

Liquidity Mining & Yield Farming - Beginners Guide

PreviousDeFi - Beginners GuideNextLiquidity Pools - Beginners Guide

Last updated 4 years ago

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Please note, the guides and any other documentation in this section are not financial advice. Please always double-check sources on keep educating yourself and do your own research (DYOR).

What is liquidity mining?

Liquidity mining is a DeFi (decentralized finance) mechanism in which participants supply cryptocurrencies into liquidity pools, and are rewarded with fees and tokens based on their share of the total pool liquidity. This focuses on incentivizing the injection of liquidity in the protocol in exchange for distributing among users a series of tokens that give access to the governance of the project and that can also be exchanged for better rewards or other cryptocurrencies.

These tokens may or may not give voting power within the protocol. Besides, they regularly offer access to interest or rewards that are paid regularly to their holders. In this way, the more money they block on the platform, the more tokens they receive and the more rewards they obtain, thereby making higher profits.

What Is Yield Farming?

Yield farming is the practice of staking or lending crypto assets to generate high returns or rewards in the form of additional cryptocurrency. In short, yield farming protocols incentivize liquidity providers (LP) to stake or lock up their crypto assets in a smart contract-based liquidity pool. These incentives can be a percentage of transaction fees, interest from lenders or a governance token (see liquidity mining). These returns are expressed as an annual percentage yield (APY). As more investors add funds to the related liquidity pool, the value of the issued returns rise in value.

At its core, yield farming is a process that allows cryptocurrency holders to lock up their holdings, which in turn provides them with rewards. More specifically, it’s a process that lets you earn either fixed or variable interest by investing crypto in a DeFi market.

Simply put, yield farming involves lending cryptocurrency via the Ethereum network. When loans are made via banks using fiat money, the amount lent out is paid back with interest. With yield farming, the concept is the same: a cryptocurrency that would otherwise be sitting in an exchange or a wallet is lent out via DeFi protocols (or locked into smart contracts, in Ethereum terms) to get a return.

Useful articles:

Videos about Liquidity Mining & Yield Farming:

πŸ“–
https://3commas.io/blog/what-is-liquidity-mining-and-how-does-it-work
https://academy.bit2me.com/en/que-es-liquidity-mining/
https://coinmarketcap.com/alexandria/article/what-is-yield-farming
https://decrypt.co/resources/what-is-yield-farming-beginners-guide
Video: Liquidity Mining on Cake DeFi explained simply and quickly. (Under 3minutes!)
Video: What is yield farming?
Video: A DeFi Lesson: What is Yield Farming?