What is Yield Farming and How Do You Make Money? | DeFi Yield Farming Part 3
We've talked about what DeFi was and what liquidity pools are. We talked about some of the interesting ways they're all put together and now we're going to get to what we really wanted to talk about which is DeFi yield farming, and how you make money from yield farming. Click here to sign up for our free cryptocurrency courses session.beessocial.us/portal
If you missed the first 2 parts of the videos series you can watch them below.
Check out the 3 part series on Yield Farming here vimeopro.com/beessocial/yield-farming/
Watch all 3 DeFi Yield Farming videos in one presentation youtu.be/FQw2QzEv0MY
DeFi yield farming is going to show you what you get out of your investment, but you're not going to squeeze your investment dry. So what happens is you've put capital in the liquidity pool and that liquidity pool is appreciating.
You're not squeezing anything out of that liquidity pool. The liquidity pool is actually growing or responding in concert with the pace of the appreciation or the depreciation of the asset. Plus the trading fees. And you should be cool with that because what we're saying is you placed your capital in a pool and when people use it, you're going to get trading fees. And so you're going to make more on your capital.
So your capital is actually working for you. We're leaving that alone. What yield farming is saying, you're doing such a great job, thank you for taking the time to put your tokens in our liquidity pool. In return, we're going to yield you out something. For example, if you were to put capital in one of the balancer liquidity pools, they will yield you out balancer tokens.
So today a balancer token may be trading around $40 or $50. What that means is you've actually yielded out five or six tokens and you multiply that times 50 and maybe you'll get $250 or $300 in addition to the trading fees and the appreciation of the capital there. Another way to do it, and what we're doing with be BEES.Social is you're actually yielding out a token.
You put your capital in the liquidity pool and you stake it in that liquidity pool. And what you get in return is a token that you can use for other capital growth. In BEES.Social that capital growth opportunity is perpetual. So as long as you're in that pool, you will continue yielding seeds. Just like if you are in a balancer pool, you will continue yielding balancer tokens.
Regardless of what you do, DeFi yield farming is a transformative experience from a financial perspective. Not only is your money working for you, just being a part of a trading situation. Your money is actually working for you by being a part of a yielding situation.
So let's take a look at it this way.
You first get appreciation for the coins
You next Get appreciation due to the trading fees.
And finally, you can get appreciation due to the yield brought back to you in the form of tokens.
So this DeFi yield farming is something you should definitely do because it, it takes advantage of everything in this DeFi universe.
DeFi yield farming takes advantage of liquidity pools.
It takes advantage of automated market makers, like a UniSwap, or a balancer.
It takes advantage of concepts such as the growth of a token and looking at placing a token in an automated market maker. And it also takes advantage of the concept of yielding and yielding either a token or a token with additional value.
So we totally encourage you to participate in yield farming, either with us, BEES.Social or just take this knowledge and use it to spend some time on a search engine or Medium.com, or anything just to learn about decentralized finance and what you can do with yield farming.
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What are Liquidity Pools? academia.edu/47791357/DeFi_Yield_Farming_Liquidity_Pools_and_Liquidity_Providers