What is Yield Farming?

How cryptocurrency can generate as much income as possible for you.

Yield farming, also known as liquidity mining, is a way for investors to earn a return on their investment by providing liquidity to a decentralized finance (DeFi) protocol.

Essentially, yield farmers deposit their assets into a pool on the protocol, which is then used to provide liquidity to traders on the platform. In return for providing this liquidity, the yield farmers receive a portion of the trading fees generated by the protocol, as well as a reward in the form of the protocol's native token. One of the key benefits of yield farming is that it allows investors to earn a return on their assets without having to sell them, as they would with traditional investments such as stocks or bonds.

This can be particularly attractive for investors who believe that the value of their assets will increase in the future.Yield farming can be complex and risky, as the value of the rewards and the trading fees can be highly volatile.

Additionally, the liquidity pools on DeFi protocols are often overcollateralized, which means that the assets in the pool are worth more than the value of the loans or trades that are being facilitated.Overall, yield farming is an innovative way for investors to earn a return on their assets, but it does come with risks.

As with any investment, it is important for investors to thoroughly research and understand the risks before deciding to participate. It's also important to keep an eye on the overall crypto and DeFi markets, as well as the specific protocols and projects you're considering investing in.

Yield Farming with Coinchange

Coinchange aims to make yield farming more accessible and less time-consuming for investors. It provides users with a variety of pre-vetted and risk-managed yield farming strategies, allowing them to earn a return on their assets without having to spend hours researching and monitoring the markets.

At Coinchange we reduces risk is by diversifying investments across multiple protocols and pools. This helps to mitigate the risk of any one protocol or pool experiencing a significant loss. Additionally, our team of experts regularly monitors the markets and adjusts the strategies as needed to ensure that they continue to provide the best returns for our customers.

Another way our customers save time is through our user-friendly interface. Users can easily view and monitor their investments and track their returns in real-time.

Below are the explained steps how we at Coinchange generate yield for you on your digital assets.
Step 1

You invest crypto
with Coinchange

The easiest and fastest way to put your idle digital assets to work is by transferring your crypto or cash to your Coinchange earn account.

Step 2

We allocate the crypto to blockchain protocols

We use advanced data models and a robust risk-assessment process to find a diversified portfolio of low risk, high yield protocols across multiple blockchains.

Step 3

Protocols provide
a market for trading

Your crypto makes Decentralized Finance possible by providing liquidity for DeFi users to buy, sell and swap crypto.

Step 4

DeFi users
pay trading fees

These fees are paid to the protocol automatically as part of the "Smart Contract" transaction. The more protocol activity, the more fees are generated.

Step 5

We collect and
manage the fees

Protocols calculate the fee share based on the amount of liquidity being provided.  They pay it out in the form of reward tokens, which we can reinvest, trade or manage in other ways to increase returns.

Step 6

You earn high yield!

e sell the reward token for your in-kind cryptocurrency and pay you the yield! The yield is automatically added to your Earn Account so you earn compounding  returns.

At the core of our product is our automated algorithm, which is a complex system that’s designed to tackle difficult issues and make profitable investment decisions so our users can earn competitive yields. The automated algorithm will maximize profit while using the list of yield-farming strategies available that our Intelligence and Quant teams have created.

Coinchange utilizes a centralized, off-chain communication mechanism to interact with the smart contracts that run and power our supported DeFi protocols. This is made possible through our proxy smart contracts, which merge execution logic into one transaction, effectively lowering overall transaction fees and making them less prone to front-running.

Yield vs. Interest

Once we’ve identified the best protocols to work with, the yield generation process begins. DeFi users incur fees for engaging in transactional activity on the selected protocol - these fees are then distributed to protocol stakeholders for engaging with the protocol.

As the fees continue to accrue from increased volume and usage on the protocol, Coinchange takes the revenue earned from fees and provides you with a consistent yield on a daily basis. This process continues as your interest starts to compound, meaning your portfolio is being supplied with a recurring source of passive income.

Contrary to most of our competition, we provide passive income to users via DeFi protocol revenue. We don’t lend our users funds to institutions that will trade and make big financial plays, and we also don't use them algorithmically to generate yield. Fairness and transparency are the cornerstones of our business model.

Optimized DeFi Yield