Many crypto community members mistakenly believe that DeFi protocols work exclusively on the Ethereum blockchain. There are also alternative platforms on the market, within the walls of which developers launch decentralized projects. Based on their blockchains, as in the case of Ethereum, you can make money from profitable yield farming.
What is Yield Farming?
Income farming is a way to earn money on DeFi protocols. The essence of the scheme is that the investor distributes his assets among the most profitable decentralized projects to earn as much money as possible on his investments.
In other words, Yield Farming is a movement whose participants strive to squeeze maximum profit out of their investments through DeFi protocols. The name can be explained by the direction of work of crypto farmers – they “grow” their income from previously “sown” investments.
How People Actually Make Money From Yield Farming?
- Earnings on interest through borrowing funds and rewards. To do this, the farmer needs to register with a DeFi project that issues loans. The funds are transferred to another user who has submitted an application for a loan under special conditions – with subsequent payment of interest. The commissions received are the crypto farmer’s income from participation in the project. In addition, startup tokens are distributed among Compound users. By selling them or saving them for the future (waiting for an increase in the price of coins), you can also make additional profit.
- Mining (extraction) of liquidity. Users are rewarded for working with a specific protocol. They act as liquidity providers, popularizing the project. As a rule, a startup distributes a certain amount of cryptocurrency between participants every day. The influx of clients increases the demand for the startup and its products, and, as a result, the project token becomes more expensive. It can subsequently be sold on a decentralized exchange or other trading platform.
| Note: Beefy Finance originally launched on the BNB Smart Chain but now supports other blockchains, including Polygon, Ethereum, and Fantom. |
- Conducting swaps – exchanging tokens of one protocol for coins of another. An important component of profitable farming is constant market research to find alternative strategies. As soon as a community member finds a new, more profitable investment option, he redistributes the funds. The swap principle comes in handy here, with the help of which less profitable tokens are transformed into others – more economically attractive. Among crypto farmers, this procedure is usually called asset rotation.
Beefy Finance For Yield Framing Novices!
Yield farming can seem confusing due to the many technical terms and complex strategies involved. However, in fact, If you want to start Yield Farming, Beefy Finance is the right choice for you! It’s an easy-to-use decentralized multi-platform for Farming automation. The system can independently select the most profitable protocols for profitable farmers, so the farmers can focus on automation to provide the highest returns with the least amount of interaction.
Experts analyzed the main features of the project and its token. From the review, you will learn what opportunities for earning money the Beefy protocol offers, where to buy and store its token, and much more. The work with the protocol is carried out through the section https://app.beefy.finance/#/. You can connect through Binance Chain Wallet, MathWallet, Trust Wallet, SafePal App, and Wallet Connect.
Welcome to Beefy Finance – yield farming optimizer on #BSC .
Put your digital assets to work for you and earn passive income 24/7, while spending your time on things that matter most.#beefylearn $BIFI pic.twitter.com/4O4WcoPD12
— Beefy (@beefyfinance) January 22, 2021
How Beefy Finance Works?
The essence of the interaction is the creation and use of storage facilities – Vaults, similar to the usual DeFi pools. A vault is an investment vehicle that uses a specific set of strategies to automate the best available yield farming opportunities. Any community member can create strategies and then bring them to the public for a vote.
- Vaults liquidity can be expressed in any asset. Some assets are provided as security for others. Earned profits can be reinvested.
- Working with storage facilities allows you to save on fees, maintain a normal collateral-to-debt ratio, automatically reinvest profits, and optimize for optimal returns.
There are two main types of storage:
- Market Money: Uses stablecoin lending platforms such as ForTube to maximize profits on various coins (BUSD, DOT, DAI, USDT, LINK, ETH, or BTCB).
- Native Token Farming: Allows you to invest various assets to earn profits in the form of the BIFI Native Token.
Conclusion
Beefy Finance is a protocol that took the traditional implementation of profit pools as a basis but worked it out in a new way for BSC. Judging by the mood of the team, this is just the beginning – the developers plan to introduce innovations in the future actively. An inclusive community management system aims to attract many like-minded people into the crypto space, supporting further developments. The project is currently focused on establishing itself as a leading yield optimizer in cross-chain yield, and that includes ETH, BSC, Polygon, Fantom, Avalanche, and many more. Most APYs range between 3% – 20% return, and for some projects, the figure may be much higher.
