With the recent boom of Metaverse and Meme coins, it seems that Yield Farming projects have been forgotten about. With the “DeFi Summer of 2020” over, Yield Farming still remains one of the most popular ways to earn rewards with your crypto.
If you’re not familiar with Yield Farming, it allows you to earn with your existing cryptocurrency by lending out and staking your crypto on liquidity pools. There are a variety of popular options for Yield Farming, and in this article we will explore our top 5 projects that have a great outlook in 2022. The below list is in order of market capitalization, lowest to highest.
#5 Curve DAO Token (CRV) – $1.5 billion
Curve DAO is a decentralized exchange and market maker protocol. Curve DAO Token (CRV), is the ERC-20 token that powers the Curve network.
Curve DAO makes it easy to swap between different ERC-20 tokens, essentially acting as a competitor to Uniswap. However, unlike Uniswap, Curve DAO is meant to swap ETH into stablecoins like USDC, DAI, etc. In addition, Curve is able to swap the tokens for less fees because it rewards its users in CRV instead of charging swap fees.
CRV holders may stake their coins in order to collect rewards, or they can become part of the CRV liquidity pool and earn tokens that way. Curve DAO is one of the most popular platforms for Yield Farming, and the long term outlook of this project is extremely bullish.
#4 Compound (COMP) – $1.9 billion
Similar to Curve DAO, Compound allows users to deposit cryptocurrency into liquidity pools and earn rewards in the form of cTokens. In addition, Compound rewards users for interacting with their platform in the form of COMP tokens, which further incentivizes the ecosystem.
Compound is a king in the DeFi space. In fact, at the time of writing the Compound network has over $19 billion in assets earning interest across 16 networks.
If you’re looking to make money with DeFi, I highly recommend checking out Compound.
#3 Aave (AAVE) – $3.7 billion
Aave is an open source liquidity platform that allows users to earn interest on deposits and borrowing of their assets. At the time of writing, there are over $26 billion in assets staked on the Aave platform, which speaks to the sheer scale of the DeFi movement.
Aave also has a native token called AAVE. This token incentivizes users to use the platform by offering discount on fees, providing vote power for governance, and a host of other advantages.
When it comes to Yield Farming, it’s not surprising to see several liquidity pools working together. Looking at the assets available on Aave, the highest earning asset is Compound – with a deposit APY of 6%.
Aave is one of the top contenders when it comes to Yield Farming, and with over $26 billion in assets locked, it’s a great option if you’re looking to earn interest rate on your existing cryptocurrency.
#2 PancakeSwap (CAKE) – $4.4 billion
Unless you’re new to the crypto world, chances are you’ve heard of PancakeSwap. It’s the most popular decentralized exchange on the Binance Smart Chain, with over $1.7 billion in trading volume in the past 24 hours.
Users can Yield Farm using PancakeSwap by providing liquidity to the platform. In return, users will receive LP (Liquidity Pool) tokens, which can be converted to CAKE or any other cryptocurrency.
Since PancakeSwap is one of the most popular decentralized exchanges, it comes as no surprise that it’s also one of the highest valued Yield Farming coins. PancakeSwap’s popularity is only growing, which makes this a great project to watch for 2022.
#1 Uniswap (UNI) – $14 billion
The king of all DeFi exchanges is Uniswap, the number one decentralized exchange on the Ethereum network. Currently boasting a 24 hour trading volume of over $3 billion across its 3 different versions.
For those confused why there are multiple versions for Uniswap, each version increased capital efficiency and accuracy for the exchange. This means lower fees and better rates for users.
Users can provide liquidity to Uniswap via their online portal by using the Pool option. The process is similar to PancakeSwap, except it happens on the Ethereum network.
As the top decentralized exchange, Uniswap makes for a great long term project.
Conclusion
Yield Farming can be a great way to earn using your existing cryptocurrency. However, note that Yield Farming provides the highest returns when an asset is trading sideways. As such, it’s best to Yield Farm if you believe the assets will continue trading at the same level, without much price action.
Overall, Yield Farming is a great example of some of DeFi’s greatest tools. If you’re interested in learning more about DeFi, Yield Farming is a great way to get your foot in the door.
Disclosure: This is not trading or investment advice. Always do your own research before buying any cryptocurrency.
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