How Yield Farming Works | Kiplinger

How Yield Farming Works | Kiplinger

Even with the recent downturn in the crypto markets, the total value of assets locked in decentralized finance (DeFi) protocols currently sits at over $42 billion. For the uninitiated, decentralized finance is a growing collection of financial tools and protocols allowing users to trade, borrow, and lend money on the blockchain without the need for third-party approval.

Perhaps the largest catalyst for DeFi’s growth has been the rise in popularity of yield farming, a rather risky ROI-optimizing strategy that offers significantly greater returns than investing traditional. Due to its high-risk, high reward nature and the general preference toward speculation in crypto, yield farming has quickly become one of the most favored use cases of decentralized finance.

What is yield farming?

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