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– TIMESTAMPS –
1:43 What’s Yield Farming?
4:50 Compound Yield Hacking
7:16 Incomes Comp Tokens
10:14 “Arbitrage” Yields
11:15 Liquidity Mining / Pool Tokens
13:05 Liquidity Mining with sBTC
15:10 Dangers of Yield Farming
⛓️ 🔗 Useful Hyperlinks & Sources 🔗 ⛓️
► Compound Finance:
► Curve Finance:
► Mintr on Synthetix:
► sBTC Yield Farming:
► Compound Proposal:
► mStable Docs:
► bZx Assault:
► Balancer Disclosure:
🤔 What’s Yield Farming? 🤔
It is a fairly broad time period that refers to chasing yield within the DeFi area. Mainly, allocating crypto to lending, borrowing and liquidity pool alternatives and utilizing interoperable protocols to reinforce that yield.
These are offered via quite a few dApps which I’m certain a lot of you’ve gotten already heard of. dApps and platforms similar to:
– Compound finance
– Maker Dao
👨🌾 Comp Yield Farming 👨🌾
Compound finance is a decentralised lending platform the place persons are matched via good contracts. In an effort to incentivise use they disbursed these Comp tokens.
This was primarily based on the rate of interest charged on the loans. Folks have been inspired to lend extra to earn. This meant the next rate of interest may very well be sponsored with Comp tokens. Those that are lending would additionally earn COMP tokens so that they have been additionally incentivised to do it.
These lenders would then use the funds that that they had deposited as a technique to take out a flash mortgage and earn themselves extra COMP. They’d additionally then take these flash mortgage funds and use them with a purpose to generate additional yield by lending once more
This allowed these farmers to earn yield in extra of 100%. Nonetheless, given a latest governance change, this mechanism has been tailored.
Yield farming can nonetheless be performed over on instadapp the place you possibly can present lending to different swimming pools.
🌽 Arbitrage Yields 🌽
Provided that there are totally different lending protocols and markets, you possibly can “arbitrage” out the relative yield distinction between these swimming pools and use that with a purpose to earn these governance tokens.
This consists of on platforms similar to Aave, MakerDao, Compound and so on. You may see a full overview of the totally different charges on the lend / borrow aspect over on websites similar to Defirate which break issues down fairly nicely.
👩🌾 Synthetix Yield Farming 👩🌾
You may present liqudity to swimming pools of Synthetix’s Artificial tokens over at Curve Finance. These are both for the sUSD stablecoin pool (with USDC, USDT, DAI) or to the artificial Bitcoin pool.
It will require you to sned your sUSD, WBTC or renBTC over to a curve finance pool. You’ll then earn liquidity pool tokens and rewards from balancer pool and Curve once they go stay.
The good thing about utilizing these Bitcoin tokens over USD backed tokens is that you do not have to surrender your upside on the Bitcoin with a purpose to earn yield in your Bitcoin.
⚠️ Dangers ⚠️
There are dangers from yield farming and these come from good contract vulnerabilities. There have been quite a few instances the place this has already occurred.
Just a few months in the past you had that flashloan assault that took benefit of bZx, fulcrum and some different protocols.
Just a few days in the past you had an assault on one of many Balancer swimming pools. This was fairly a complicated assault that once more used flash loans to take out a substantial place of wETH to commerce in opposition to the Statera funding token.
You even have the sting dangers that come from black swan occasions which might result in liquidations in swimming pools and vaults. This occurred within the MakerDao vaults again in March.
📜 Disclaimer 📜
The data contained herein is for informational functions solely. Nothing herein shall be construed to be monetary authorized or tax recommendation. The content material of this video is solely the opinions of the speaker who will not be a licensed monetary advisor or registered funding advisor. Buying and selling Foreign exchange, cryptocurrencies and CFDs poses appreciable danger of loss. The speaker doesn’t assure any explicit consequence.
#defi #yieldfarming #Ethereum #crypto #compoundfinance #Synthetix #uniswap #flashloan
Source: Coin Bureau