Entity: 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. It involves actively moving tokens across DeFi protocols to earn optimized returns.
YIELD-FARMING
Etymology
The term 'yield farming' combines 'yield,' referring to the output or return generated by an investment, and 'farming,' which implies the act of cultivating or nurturing assets to yield rewards.
Definition
Yield farming is the practice of staking or lending crypto assets in order to generate high returns or rewards in the form of additional cryptocurrency. It involves actively moving tokens across DeFi protocols to earn optimized returns.
Historical Context
Yield farming emerged as a popular application of decentralized finance (DeFi) in recent years, allowing cryptocurrency holders to participate in various protocols and earn rewards for providing liquidity.
Cultural Significance
Yield farming has revolutionized the crypto space by offering investors the opportunity to earn passive income through their digital assets. It has also led to the development of new DeFi protocols and strategies to maximize returns.
Related Concepts
- Staking: Passive locking of tokens to earn predictable yields
- DeFi: Decentralized finance applications that operate without traditional financial intermediaries
See Also
Yield farming is a process in decentralized finance (DeFi) that allows cryptocurrency holders to lock up their holdings to receive rewards.