Decentralized Finance has made an impeccable change in financial industries and their dependencies. The intro of DeFi has taken out many intermediaries and made the financial services a trustable and hassle-free one. The concept of yield farming is also getting more featured as Decentralized Finance backs it up from behind. The reason why DeFi is considered to be the best financial service method is because of its blockchain technology. The Blockchain in the DeFi makes it more decentralized and at the same time, every transaction processed will be more anonymous so it is impossible to trace back the transactions to the owner of the transactions. The privacy DeFi provides and all other perks DeFi makes people notice the yield Farming.
Yield Farming
Yield farming is the concept of rewarding cryptocurrency or token stakes for depositing their units. When the cryptocurrency is being staked in the yield farming platform, the person who stakes will receive rewards lending their tokens. this is also known as the high liquidity pool,
Returns in yield Farming
The attraction towards the yield farming is mainly based on the returns they receive for lending the token from staking, here are some methods are given below,
Annual Percentage Rate (APR)
The annual percentage rate(APR) is a type of interest rate that is arrived at without the inclusive or effect of the compound. The investor will get a reward or return based on the investment they made.
Annual Percentage Yield(APY)
The Annual Percentage Yield refers to the concept of getting compound based on the reinvestment. This is one of the most beneficial forms of return.
Wrapping Up
Yield farming in DeFi platforms is a very good business to pursue in the market and DeFi plays a vital role in this market surge. All you need to do is to find a better development firm who can deliver you an excellent product that suffices the need and your requirements.