Yield Farming Crypto List

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Along with decentralized finance, there is evolving crypto yield farming — a new way of generating rewards. It allows earning income by using a DeFi protocol, where users can provide liquidity and deposit coins. In this article, let’s talk about  what crypto yield farming is what is and what the top yield farming crypto platforms are.

What Is Crypto Yield Farming?

Crypto yield farming is a method to get rewards by cryptocurrency holding. Different protocols offer users to lock their assets into a pool for the purpose of granting credit, obtaining loans or providing liquidity. And for providing the coins, protocols pay a certain return on a regular basis. At first, farming was done only in the Ethereum network, but later, such DeFi services appeared in many other alternative ecosystems: Solana, Fantom, Polygon, etc.

There are several farming methods:

  • Liquidity mining. Users make a deposit on DEXs to provide liquidity for trading. DEXs charge a fee for exchanging coins and pay it to providers.
  • Lending. Holders lend cryptocurrency to other users for a fee.
  • Borrowing. By using one token as collateral, users can borrow another token. With these borrowed coins, users can farm.

The crypto yield farming process itself is quite simple: users need to pick out a decentralized platform, synchronize their wallet, and add coins to the pool. What is important is that no registration or verification is required to connect a wallet to DEX. If you want to farm a BTC/USDT pair, you need to deposit the equivalent amount in BTC and USDT into the pool.

Some investors consider staking as a part of yield farming. This is not entirely true, as there are several important differences between staking and farming. The most important thing is that staking is much simpler. Yield farming requires more attention because users have to choose which tokens and on which platform to lock. Sometimes, to get better incomes, users need to change these platforms. Also, farming is much riskier because a rug pull can happen.

What Is the Best Yield Farming Crypto

Before finding crypto with the best yield farming opportunities, let’s find out in what manner the returns are calculated. They are calculated on an annualized basis, much the same as in conventional banks. Basically, there are two measures: the APR and APY. The first measure does not include the compounding rate within a year, while the second includes. In some cases, the yield is 100% or even more.

It is not easy to say what is the best crypto for yield farming because users can employ a variety of strategies. To determine the best coin for farming, take into account the risk. Also, it’s essential to assess the volatility. For instance, you have decided to invest 10 000 dollars in a pool of a token and it farms 100% annually. But if it drops 80% within a year, then the worth of tokens will be only 4000 dollars. Therefore, for users who don't want to take too many risks, it’s better to farm popular tokens with large capitalizations and use the best yield farming crypto platforms.

What Protocols Provide the Best Crypto Farming Opportunities

Many users strive to find projects with the best yield farming opportunities. They often choose new and less popular projects that offer better conditions. But this is definitely not the best option as it creates certain risks. A large number of the protocols are launched by small teams with low budgets. This creates a risk that a smart contract will have a certain bug or vulnerability. And because blockchain transactions cannot be undone, this can cause the loss of funds. 

New DeFi services keep emerging, promising huge rewards. It’s definitely not a good idea to carelessly deposit tokens in the hope of high returns. It’s worth looking at popular DeFi crypto yield farming protocols. You can compare them by such parameters as yields, safety, and user-friendliness and then choose the one that suits you. To get more profits, you can also experiment and try to develop the best yield farming strategy.

Top Yield Farming Crypto Platforms

At this time, there is already a yield farming crypto list of a few dozen of platforms where users are able to farm. All these protocols offer different farming conditions regarding available token pairs, yields, and additional features. Therefore it's important that you look into things in detail before you decide to lock your assets in the pool.

In terms of functionality, platforms offer a variety of features. On some platforms, users can mine liquidity, on others — lend and borrow cryptocurrencies. Some protocols specialize in providing liquidity for stablecoins, and users can farm stablecoins with minimal risk for their assets. While at first crypto yield farming platforms were only available on the Ethereum network, now there are more and more protocols on a variety of blockchains. 

What is the Best Yield Farming Strategy

The DeFi industry offers a lot of opportunities for users who want to mine liquidity or lend crypto assets. According to your financial goals, you can use a variety of strategies and vary the risks you are taking. If your goal is to earn as much cryptocurrency as possible, then you can use a high-risk strategy. For instance, it is possible to choose high-risk crypto yield farming of new coins. It can both bring hundreds of percent of profit or lead to a big loss if the price of the crypto-asset decreases.

But the high-risk strategy may not be the best option for most users. If you are not willing to take a serious risk, then the best yield farming strategy is to stick to low-risk crypto yield farming of popular coins. And the safest method is to get a profit with dual-stablecoin pairs. Another good idea is to distribute all your coins across multiple platforms. This will reduce the risk that refers to bugs in smart contracts in case one platform goes down.