By: Eliza Bennet
Decentralized Finance (DeFi) and Yield Farming represent two revolutionary concepts reshaping the modern financial landscape. With DeFi, financial services are decentralized, meaning they operate without a governing body. Yield Farming, also known as Liquidity Mining, is a method of generating more crypto with your existing holdings. It involves leveraging the power of smart contracts on DeFi platforms. In this process, users provide liquidity to a DeFi market and are rewarded with interest and tokens.
DeFi and Yield Farming illustrate the potential of blockchain technology to offer alternatives to traditional banking and investment systems. They foster peer-to-peer interaction, minimizing the need for intermediary entities. While promising high return rates, they also come with a certain level of risk. Cybersecurity threats and high volatility are among the major challenges faced in this area.