Liquidity mining (or yield farming) is the process of depositing cryptocurrency into a liquidity pool to earn rewards, typically in the form of additional tokens.
When you provide liquidity to a decentralized exchange or protocol, you receive liquidity provider (LP) tokens representing your share of the pool. These LP tokens can then be staked to earn additional rewards from the platform's liquidity mining program.
Collections of tokens locked in smart contracts that enable decentralized trading
The practice of staking or lending crypto assets to generate high returns
A simple 4-step process to start earning with your crypto
Set up a Web3 wallet like MetaMask or Trust Wallet to interact with DeFi platforms.
Deposit token pairs into a liquidity pool to receive LP tokens in return.
Deposit your LP tokens into a yield farm to start earning rewards.
Harvest your farming rewards regularly and compound for higher returns.
Compare the best platforms for yield farming across multiple blockchains
The leading decentralized exchange on Ethereum
Popular DEX on Binance Smart Chain
Leading DEX on Avalanche
Focus on pools with established tokens rather than chasing the highest APYs from unknown projects.
Reinvest your rewards frequently to benefit from compounding returns.
Spread your liquidity across multiple protocols to mitigate risk.
Be aware of how price changes in your pool's tokens can affect your returns.
Techniques used by experienced yield farmers to maximize returns
Use services that automatically reinvest your rewards to save on gas fees and maximize compounding.
Move liquidity between different blockchain layers (L1, L2, sidechains) to chase higher yields.
Protect your investments by allocating a portion of profits to insurance protocols.
Use yield aggregators that automatically move your funds to the highest-yielding protocols.
