'What is Yield Farming and Liquidity Mining? All You Need To Know' cryptocurrency yieldfarming
Profitability in the hundreds and thousands of percent, as a rule, does not last long. The cream of the crop comes from early investors who enter the protocol in the first days or weeks of operation. Then the yield drops and it becomes unprofitable for protocols to keep a high APY forever, as high emission volumes create an excess supply of tokens, which puts pressure on the price.
Therefore, hardcore farmers are constantly looking for new projects. There is a small , but very active and super mobile international community of DeFi farmers in the world. These people enter new protocols first. Many of them operate with millions of dollars and are constantly shifting funds from one project to another in search of the highest returns.An investor deposits several cryptocurrencies into the pool for the same amount in dollar terms.
Also pay attention to the presence and size of the deposit fee. If there is such a commission, then you immediately find yourself at a loss when liquidity is injected into the pool.DeFi protocols get hacked from time to time. The only advice here is to invest in projects of technically strong teams with security audits conducted by reputable companies. Some projects are closed after hacks, but some survive even after several hacks.
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