Yield farming protocols encourage liquidity providers to temporarily pool their assets in a smart contract-based liquidity pool
According to the IDEA, the yield farming feature was added to Nobitex and Iranian users can earn rewards by locking their assets in DeFi (decentralized finance) platforms.
The nascent blockchain industry is now increasingly opening its place in finance. Decentralized finance has such attractions that millions of users and dozens of large companies in the world have turned to invest in it. In the centralized financial industry, a central institution has been designated to control affairs, investment, attracting capital, paying loans, etc., but in the decentralized world, all these things are done by users and network nodes.
Yield farming is a process in which users participate with their cryptocurrency assets in DeFi projects, or decentralized finance, and are rewarded in this way.
Yield Farming Nobitex, a new member of NobiFi
Yield farming in Nobitex is a subset of the Nobifi product. NobiFi is a service where Nobitex users can earn rewards by depositing their cryptocurrency assets. Participation pool, staking and yield farming are different parts of NobiFi, and with the development of NobiFi, Holder users can lock their cryptocurrency assets in yield farming protocols in addition to staking and receiving rewards and receive rewards.
The operation of yield farming in Nobitex is very similar to staking, with the difference that the process of receiving rewards from staking is only possible for cryptocurrencies that use the proof-of-stake consensus mechanism, but in yield farming, this possibility is also available for other cryptocurrencies. In this way, the user can participate in the yield farming of different cryptocurrencies without having to deal with the complexities and requirements of yield farming in DeFi platforms and using an integrated platform.
How to participate in yield farming projects
To start yield farming in Nobitex, users must refer to the Nobitex Yield Farming platform through the Nobitifi menu and select their desired plan and cryptocurrency. The next step is to register a request to participate in the project. It should be noted that the registration of the application for each of the plans has a specific time frame and it is not possible to apply outside of that time frame.
After registering the request, the asset is immediately locked and the user cannot withdraw the cryptocurrency until the end of the plan period. The bonus of the plan is deposited into the user’s wallet within 24 hours after the end of the plan. In the following, all these steps will be explained in more detail.
Digital currencies with yield farming capability in Nobitex
Currently, it is possible to use the yield farming feature for Tether cryptocurrency in Nobitex, and users can participate in the one-month Tether yield farming plan. Gradually, this feature will be activated for other cryptocurrencies. After the end of the plan and the release period, the bonus awarded to the user will be deposited into his wallet no later than one day later.
Each plan starts on a specific date and the deadline for registering an application to participate in it starts 3 days before the start date of the plan. Obviously, after the start of each project, it will not be possible to register a request to participate in it. Also, the request to participate in a project is accepted only if the capacity of the project is not completed.
What to know about yield farming
In short, yield farming protocols encourage liquidity providers to temporarily share or lock their crypto holdings in a smart contract-based liquidity pool. This capital is used in various DeFi projects, such as lending, and in practice, people become partners in these projects.
This process is done through Dapps or applications on the blockchain platform and smart contracts are implemented in them.
In many yield farming protocols, the governance tokens of that contract are offered as a reward to yieldfarmers, which can be traded on centralized and decentralized exchanges. The rate of rewards in yield farming is measured by APR, which stands for Annual Percentage Rate.
The first application of yield farming that became popular in the DeFi world was in Compound. Compound, a DeFi platform based on Ethereum, started distributing rewards in the form of COPM tokens to its users from June 2020. This reward was given to users who provided their liquidity to the platform. Thus, the term yield farming was born.
Another DeFi project that users can participate in and receive rewards through yield farming protocols is blockchain lending projects. In this way, lenders put their property in Dapps as a premise on the platform to be made available to borrowers and receive rewards for it. Currently, many decentralized lending protocols such as Ave, Compound, etc. have been formed on the blockchain platform.
Some users with specialized knowledge and identification of better DiFi platforms and protocols, personally enter this field and invest in decentralized projects; Some also use cryptocurrency exchange platforms that identify projects to facilitate and ensure investment in better protocols, they do this through digital currency exchanges and actually leave the work of identifying DeFi protocols to platforms like Nobitex.
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