Defi’s Hottest Trend: Crypto Real Yields

One of the most well-liked crypto passive income streams is DeFi crypto yield farming. At first, yield farming can seem to be an easy way to spend their tokens.
Siddhartha D.
8:30 12th Nov, 2022

However, there are several hazards and the laws frequently change.

Most of the time the payouts are sufficient enough to encourage users to deposit their tokens. Crypto likes its very own storylines, whether it's DeFi 2.0 or ultrasonic money.

One of the more recent innovations emerging from DeFi technology is yield farming, which is gradually proving itself as a major powerhouse in the industry. In order to effectively "farm" the best crops and provide the largest returns, yield farming comprises the practice of actively seeking out the best APYs and transferring assets around the ecosystem.

The idea of yield farming was first introduced when the Ethereum-based DeFi project Compound started offering incentives for users to use its network in exchange for COMP, which serves as COMP's native governance token. To this day, everyone who lends or borrows cryptocurrency using the platform continues to receive COMP tokens from Compound.

The most recent one is "Real yield," which, like most of the DeFi trends before it, is being hailed in both serious and vaporous ways.

Real Yield Zelta
Credits to Tutto Crypto

Real yield is a portion of a protocol's revenue that holders of its governance tokens may obtain by staking or locking them and is expressed in a popular asset like ETH or USDC. You wouldn't be far off if you said that this sounded like a dividend.

More about Real Yields:

Real yield is in contrast to the Ponzi-esque APYs of 2021 when four-digit rates were hardly noticed. The native tokens of the projects, which would be released at alarming rates in order to attract users' investments, were the main source of those profits.

All of the DeFi customers were switching between projects, investing resources for the token payouts, and racing the clock to get rid of them first. This is what is referred to as yield farming, and in 2020 and 2021, it was quite profitable.

Influencers are now praising projects for their actual yield; Redacted Cartel, Umami Finance, Gains Network, GMX, and Synthetix are just a few of those being praised for sharing profits with their customers.

What Is Yield Farming in Cryptocurrency:

A mechanism known as "yield farming" allows users to deposit cryptocurrency into a pool with other users in order to seek financial returns, often in the form of interest from lending the pooled bitcoin.

Yield farming is undoubtedly a very hazardous tactic to trade but it also comes with great potential benefits.

Some of the key takeaways for everyone who wants to get into Yield Farming can be:

  • To make things more clear, Yield Farming is a way to invest in cryptocurrencies for higher returns.
  • With the use of smart contracts, yield farms are decentralised financial investing instruments.
  • Investors that place a high priority on aggressive returns may find high-interest rates, up to 100%, in yield farms.
  • Yield farm participation implies accepting the risk of losing your entire investment.

Through decentralised finance (DeFi) services like PancakeSwap or cryptocurrency exchanges like Bitrue, you may locate yield farms.

We have now talked a lot about what Yield Farming is and its basics. Let’s dive a bit deeper to give you a 360-degree view of Yield Farming.

More about Crypto DeFi Yield Farming:

To start with Yield Farming, the users can deposit their cryptocurrency tokens in yield farming projects for a predetermined amount of time to receive incentives for their tokens.

Real Yield Zelta
Credits to The Defiant

To lock tokens and pay interest at rates ranging from very few percentage points to triple digits, yield farms employ smart contracts. The restricted tokens are frequently loaned to other users. Token borrowers must pay the interest on their cryptocurrency loans, with a portion of the money going to the trading platforms.

Other times, the locked tokens supply the trading liquidity required for the decentralised exchange. An automated market maker that requires locked tokens to complete buy and sell orders is frequently used in this kind of decentralised exchange.

In this instance, transaction fees provide passive revenue to the yield growers. Yield farming functions much like a savings account in that you make deposits with a bank, which further combines depositor money and advances loans while you get interested in the money you placed.

But with a yield farm, the bitcoin is invested in smart contract applications rather than being transformed into a mortgage or a company loan.

Risks in Yield Farming:

There have been quite a few blowups which have led to a major drop in the reputation of Decentralised Finance. Some instances like Celcius and Terra have made it very difficult for investors to trust DeFi again and this is a major reason why people think if “Real Yields” are for REAL!!

Yield Farming Zelta
Credits to pixelplex

Users' trust in the DeFi ecosystem is still being earned, and there are numerous valid reasons why they don't have it completely.

On the face of it, yield farming could appear to be a simple method to use your tokens to make money on cryptocurrency exchanges. Yield farming is still not without risk.

When it comes to yield farming, there are several ways to lose money. The first line of defence in safeguarding oneself in this comparatively recent kind of decentralised money is understanding these hazards.

The Yield farming strategies are also a major reason for people to fear them as lending, arbitrage trading, and taking part in loan pools are examples of yield farming tactics. Strategies for farming yields evolve with time.

The most popular techniques now might not be effective tomorrow due to specific circumstances. For instance, inadequate platform liquidity may have caused loan pools to become saturated.

Arbitrage trading entails looking for pricing inefficiencies across several exchanges. If volatility falls, arbitrage trading might no longer be profitable.


Yes, Yield farming is a very effective strategy for making money on DeFi platforms. When a crypto investor is aware of the numerous risks connected to yield farming, yield farming risks can be handled. This post has taught you about the risk connected to yield farming. Making the choice to engage in yield farming is simple.

“Compound” is possibly the greatest option if you're just getting started with yield farming. You can begin farming on protocols like Uniswap on Ethereum and PancakeSwap here on Binance Smart Chain once you have further refined your skill set.

Gains from being a yield farmer can be quite alluring, but it is always advisable to use caution and be aware of the risks before getting involved in the challenging, fast-paced, and highly lucrative DeFi niche known as yield farming.