Earning money seems to be easy these days, right? Everyone has some way of generating passive income, but it wasn’t always like that. In the past, people had to work hard for cash, and now? Now all you need to do is keep track of your marketplace of choice.
With that in mind, you can earn by investing in stock, but crypto is a great option too. Unfortunately, people don’t flock to crypto farming readily, and that’s because this business is very volatile. You could feel on top of the world at one point but come crashing down the next. On the other hand, many think that’s what makes the crypto world so exciting.
What is Crypto Farming?
Crypto or yield farming – call it what you will, but simply put, this is a great way to passively earn money. The core definition of this kind of farming is using DeFi to maximize rewards and earn crypto. Yes, it’s really as simple as it sounds! But there’s much more to it.
The best thing about this kind of income harvesting is that you don’t even have to do anything.
Various Types of Crypto Farming
There are several types of crypto farming for you to get into and try. Keep in mind that they all have their pros and cons. So, choosing the strategy you’ll go with means understanding and accepting the risks. Let’s get into the types:
Providing liquidity – Liquidity pools are vital for DEXs, and liquidity providers are the ones filling them up. This is beneficial for you and the DEX you choose to support. How? You’re letting other people trade your tokens for a fee when providing liquidity. A part of this fee is paid to you – a liquidity provider. As far as DEXs go, they benefit from your investment because you’re essentially giving them more assets to work with.
Staking – Similarly to providing liquidity, you’re giving your crypto away for a fee. People usually stake on proof-of-stake blockchains because they get paid a sum for pledging their assets to provide security. A quick tip: you can stake the tokens earned from providing liquidity and earn yield twice.
Lending & Borrowing – This works just as you think it does. You can lend your crypto to other users through a smart contract and earn from interest. Or give one token as collateral, borrow another and use it to farm.
With farming on Dexvers, you are able to optimize and maximize returns.
Join liquidity pools to earn tokens, then stake those tokens. This way, you don’t just grow your holdings, but also your investment in DXVS, while at the same time having a positive impact on our universe of decentralized exchange.
The Dark Side of Crypto Farming
Let us preface this subheading by saying that crypto farming is easy. It can all be done in a couple of clicks. Once your assets are staked or in a pool, all you need to do is watch them provide returns. Unfortunately, there are potential negative sides to this kind of passive income.
Crypto is very volatile, and we can’t stress that enough. That’s the main reason why people stay away from it. But once you’re in and want to start farming, here are the things you should be wary of:
Rug pulls – Project developers running away with your assets
Impermanent loss – Unrealized gains or losses when the price of your invested crypto changes
Smart contract risks – Some smart contracts are susceptible to bugs and have poor security
Regulatory risks – DeFis are designed to be safe from regulations, but the regulation of cryptocurrencies can still happen
Fraud – Mistakenly pledging your assets to a fraudulent project can and will cost you
How Does Dexvers Fit in?
To conclude, crypto farming is a high-risk-high-reward kind of business. The risks may seem high, but don’t let that scare you off. You can stake or provide liquidity with a smaller amount of crypto, at first, and see how that goes. If a project you decide to support turns out to be credible – you can always add more to it.
So, how does Dexvers fit into this whole story? We have Liquidity Pools of our own, and the Bootstrapping period has commenced. That means you can join our USDC liquidity pool and expect 200% APY. On top of that, we have the StarSeed program - where you can go into warp speed with your savings, by staking and providing liquidity at the same time.
Sounds too good to be true? Check us out and find out for yourself. And the best thing of all? That’s only the beginning of the space journey we’re taking you on. So, don’t miss the rocket and become a Dexnaut today!