Just like any other DeFi swap, it consists of several liquidity pools and each pool contains two or more digital tokens or fiat assets. There are two main components in liquidity farming, namely liquidity pools and liquidity providers. Liquidity pools are essentially the smart contracts that drive the DeFi ecosystem.
Is liquidity farming a good way to earn passive income?
Confirm your order by clicking "Claim Rewards". In a nutshell, liquidity farming is a great alternative to earn crypto passive income. Just by locking your assets in liquidity pools and becoming a liquidity provider, you can get significant rewards every now and then.
What is liquidity mining?
Liquidity mining occurs when a liquidity farming participant earns tokens as a reward or additional compensation for contributing their funds to the liquidity pool. “Liquidity mining supercharges yield farming,” notes Brady Dale in CoinDesk .
What is yield farming?
Consider the following aspects for a better understanding of yield farming: Crypto assets are stored into a smart contract-based liquidity pool like ETH/USD by investors known as yield farmers, and the practice is known as Yield Farming. The locked assets are then made available to other protocol users.
