Faiz is here, and if you're looking for the information on liquid mining and yield farming, then you have landed in the right place. The world is expanding into decentralised finance, and crypto is connected. We have seen the popularity of Liquidity mining and yield farming; however, there is a risk involved, and if you are ready to take a risk, then this article is for you, so stay tuned till the end and enjoy the article. The terms yield farming and liquid mining sound technical and complicated, especially for new users. So these are the ways to earn passive income in the crypto field. You can do it by crypto holding. Here we are going to talk in detail, so let's start.
Yield farming is all about putting a crypto to work. You are investing your Crypto in that particular digital farm to grow your crypto more. When you leave your token in the wallet as a liquid, you get nothing. Instead of this, if you stake those tokens in any DeFi platform as a lend or stake, then you are getting rewards. This is called yield farming. It's almost similar to earning interest from your savings bank account, but here the one thing is different: the risk is higher, the reward is higher in the form of Crypto.
Let's understand it by the example, A Pair of XRP and USDT and which is listed on any default lending protocol. You have a deposit here and you can earn interest. There is a way to get the Highest yield, but I'm not going to share those yields here because it requires Continuous attention and Knowledge.
Now, let's talk about the liquidity mining. It is like fueling a Defi engine. Here you provide the liquidity to the DEX, and there are many DEXs such as Leodex, Uniswap, Sushiswap, Pancake swap, and more. deposit in a pair of tokens in the liquidity pool, so that means you are providing liquidity for both tokens, and that will make trading easy for other users. So it's useful for smooth Trading Without any issues for the traders. We are contributing to the platform, which makes trading easy for the traders, and for this contribution, you can earn Rewards. In terms of transaction fees, you can sometimes earn Native tokens.
So the platform and the users are saying thank you for contributing to yield farming and providing liquidity. And in return, you get a reward as a thank you. The more you provide liquidity and invest in yield farming, the more you earn. But it is risky too, so you have to do your research. Also, crypto is volatile, so you have to understand it. Understand the risk and then dive into it. This is not financial advice for you.
So both strategies can be profitable for you, but there is volatility, and the whole crypto market is unpredictable. Sometimes even the Charts do not work on Crypto because Crypto is different than the other markets.
So these two are new ways to earn Crypto, and this is part of the Defi. Also, you have to understand that this is not a quick-rich scheme, but good for the investors. Please do your contribution, share this post, and also do not forget to leave your beautiful comment below in the comment section. Now I'm winding up this post, and Faiz is signing off.
