Yield Farming

Yield farming, often referred to as liquidity mining, is a strategy in decentralized finance (DeFi) where cryptocurrency holders aim to maximize returns on their digital assets by locking them up in various DeFi protocols. The core idea is to move cryptocurrencies between different lending protocols, liquidity pools, and other DeFi applications to earn the highest possible interest or rewards. Farmers typically deposit their assets into liquidity pools to provide liquidity for decentralized exchanges or lending platforms, and in return, they receive a share of transaction fees, interest, or newly minted governance tokens.