All information about pancakeswap staking, crypto interest and more

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Yield Farming is a tool for those who want to increase their crypto assets. With farming, profits of several hundred percent can be achieved – but of course not without risk.

In farming, you use smart contracts to lend your money and collect fees in the form of a cryptocurrency.

The concept of yield farming is closely linked to the development of decentralized financial markets (DeFi), which in turn are based on blockchain technology. A special permit is not required to participate in these marketplaces, the existence of a wallet with crypto currencies is sufficient. There are no intermediaries here and they are not required. This simplified interaction and the use of blockchains enables new applications such as yielding.

Farming can be done in different ways. For example, it is possible to use DeFi platforms and lend tokens there. Anyone who borrows the crypto currencies has to pay interest for it. The interest rate depends on the platform and is variable. There are different approaches as to how the generation of interest on the DeFi platforms can be optimized.

There are fees for using the platforms, which are passed on to the participants who provide the liquidity. So whoever pays money into the so-called liquidity pool receives these fees according to his share in the pool. The specific design of corresponding marketplaces can be very complex and is currently changing.

High interest rates can often be seen on pancakes swap. Pancakeswap is a decentralized crypto exchange on which BEP20 tokens can be exchanged on a Binance Smart Chain. The use of the Binance Smart Chain is special as most similar exchanges use Ethereum. Pancakeswap attracted attention with the performance of its token: the price rose over 900 percent at times. The exchange supports liquidity mining and token staking to generate returns. The token is popular with cryptocurrency users for performing the yielding described here. Many yielding strategies are therefore based on pancake swap.
(Graphic: t3n)

If you want to participate in yielding, you have to pay into one of the available liquidity pools. To do this, you connect your wallet to the pool, provide the desired liquidity and then receive your reward. The reward is in the form of tokens that represent your share of the liquidity pool. For every swap made in the pool, you will then receive further rewards. In order for this to work, the tokens must first be staked. The platform must use protocols with the appropriate functionality for this. Of course, it is always possible to break the stakes again.

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