Decentralized finance sector Ethereum (or DeFi) has seen explosive growth in the last few months. One of the main drivers of this growth is what’s known as yield farming. What is Yield farming? Yield farming is based on governance tokens such as Compound’s COMP and Curve’s CRMV that are used by DeFi projects for managing their respective protocols. Governance tokens are awarded to users who supply these protocols in yield farming campaigns.
Synthetic assets project Synthetix was the first to experiment with this type of campaign in March 2020. The team rewarded sUSD liquidity suppliers on Curve and an earlier version of yEarn using Synthetix’s SNX tokens.
Compound’s launch in the summer of its COMP rewards really catalyzed this phenomenon and set the stage for other projects to follow. With governance tokens such as YFI, CRV and BAL, MTA and many more launching live with these campaigns, yield farming has taken DeFi by storm.
However, yield farming is still a young field and there are likely to be many projects that use this cryptonative bootstrapping technique for years to come. Although it’s not too late to get involved in yield farming opportunities, you will want to make sure that your neo-agricultural ventures are as successful as possible. Here are some great resources that I recommend to anyone who is new to yield farming.
Yieldfarming.info was created by developer weeb as an effort to love the project. You can plug your Ethereum address into it to get stats about your current yield farming activities.
The site tracks some the biggest rewards opportunities in the arena, such as the Curve USD pool that awards liquidity providers with both the SNX or CRV. There is also a FUN ZONE where data can be fetched for riskier, more experimental yield farming projects. Yam Finance’s now-defunct YAMv1 or Tendies (TEND).
DeFi Dad, host of the Ethereal podcast, and creator of YouTube DeFi tutorials videos is a great person you can follow if yield farming interests you. Why? He has a knack for explaining DeFi/yield farming processes in a simple, step-by–step manner and is always open about the risks. He is a straight-shooter who is genuinely interested helping newcomers learn about Ethereum’s most exciting projects.
Zapper, which is the result of a merger of the DeFiZap & DeFiSnap team back in May 2020 has quickly become the most important DeFi dashboard for Ethereum’s first wave yield farmers.
The best thing about Zapper is its ability to track portfolios and other important information. The dashboard allows you to “zap” into liquidity pool and yield farming opportunities in a single click. It efficiently handles all transactions under the hood.
I would have been insane if I hadn’t had @zapper_fi to help me while I was yield farming the last few weeks. The site has a section that tracks yield farming gains in real time.
Are you interested in Ethereum and DeFi projects, but still use CoinMarketCap as your primary crypto markets website? You are welcome to CoinGecko, my friend.
CoinGecko is a cryptocurrency exchange that does everything CMC does. However, its team is much more agile and has a deeper understanding of the cryptoeconomy. CoinGecko is an excellent site for yield farmers. It provides key market data and trading pairs lists, which can be used to find good trades.
CoinGecko is also a great site to track social currency stats, as yield farming campaigns are now popping up around social projects like $ALEX. It’s definitely worth keeping in mind.
. @coingecko has completely replaced CMC for my. It took a while (old habits die hard), but it finally happened.
Decentralized exchanges (or DEXes) are king in 2020. Uniswap is the king of DEXes. It’s here to stay, and it’s going be a tour de force in the future. Learn more about it now.
Uniswap is mentioned because you may need to trade assets in order to stake assets for yield farming. Uniswap is your best option. It offers the best liquidity and overall trading experience of any DEX platform.
ETH Gas Station
In the past month, Ethereum’s gas prices – which is the cost to process an Ethereum transaction — went bonkers. These prices reached 400 gwei at one point. This simply means that transactions became unusually expensive.
The good news is that Ethereum demand is high and scaling solutions are in the near future. However, for most yield farmers, high gas prices will be a pain. It’s a good idea to keep track of gas time stats. ETH Gas Station is a great tool.
DeFi has been taken by surprise this year by the yEarn initiative. Why? Because the protocol is able to generate yield automatically around the most popular Ethereum projects.
yEarn is a great tool for DeFi yield farming, but it’s not the easiest project. Learnyearn.finance, a grassroots resource, does a great job breaking down the critical dynamics of the yEarn program.
DeFi Pulse Farmer
Sometimes you need someone who can communicate complex concepts clearly. Cooper Turley, who is a writer for DeFi Pulse Farmer newsletter, among other ventures, has exactly that ability when it comes to yield agriculture.
The DeFi Pulse website is a great resource for Ethereum users in general, but Turley dives into yield farming with his Farmer newsletter. Subscribing to the newsletter is a great way to get started if you want to get into the scene.
Zerion is similar to Zapper and it’s another great dashboard for DeFi users. While some may prefer Zerion to Zapper, others might prefer Zerion. However, the former is a great dashboard and you won’t know which one you prefer until you try them both.
Social money tokens, e.g., are one area in which Zerion is more agile. ALEX and beyond have added support for all major currencies. This is a key feature for some users, as yield farming activities are beginning to appear around these tokens.
DeFi activities are relatively new so it can be difficult to deal with taxes. Yield farming is not an exception.
Some tax resources are better than others in catering to DeFi users or yield farmers. TokenTax is an example of such a tool. The solution was built by DeFi app developers, who know firsthand what DeFi users want and need to keep track of all their transactions efficiently.
The cryptoeconomy has moved towards a bull market due to the recent rise in DeFi and yield farming. However, there are risks beyond the hype.
You will need to have the best resources available to reduce these risks and maximize your yield farm. Be smart and cautious and use the best information to make informed trade decisions.