Guide: What is Yield Farming?
Crypto brings with it the promise of breaking the standards set by traditional finance. This includes being able to earn a higher APY (Annual Percentage Yield) on assets than something like normal savings accounts with a bank.
What is Yield Farming?
Yield farming is the process of lending or staking crypto assets to receive rewards or high returns. These returns are calculated in the form of APY.Essentially, liquidity providers, or LPs, stake or lock their tokens into liquidity pools run by smart contracts. Liquidity pools are simply collections of tokens that are locked into a smart contract.
Depending on the platform, users can earn a percentage of transaction fees, governance tokens, interest from borrowers, or some combination of the three. Governance tokens, as the name suggests, give holders the power to vote on the future of a blockchain project.
This booming sector of DeFi (decentralised finance) has seen exponential growth over the past few years as people seek to get the most bang for their buck.
Often times a lender’s share is represented by LP tokens. These tokens can be used to reclaim the original amount lent plus any yield, or just the yield. For example, if someone lends using PancakeSwap, they’ll receive FLIP tokens as an LP token.
Be Aware of the Risks
There are three main risks to be aware of when lending out assets for yield farming.The first is impermanent loss, which occurs when an asset in the liquidity pool sees a significant price change compared to the other assets in the pool. If 100SOL = 1ETH when the liquidity pool opens and a couple of days later 50SOL = 1ETH, impermanent loss will be experienced by the depositor. With drastic price changes, the yield earned does not make up for the impermanent loss.
Second, we have flash loan attacks. This is a process where scammers borrow piles of money to manipulate the market and DeFi protocols. A prime example of a flash loan attack is the one suffered by Cream Finance in 2021.
Lastly, rug pulls are an exit scam seen in the DeFi space. In this type of scam, developers will create a new token and pair it with a leading crypto, like ETH or USDT, to create a liquidity pool. They use a combo of astronomically high yields and marketing to entice people to deposit assets into the pool.
Once their target is achieved, the scammers will use a ‘back door’ coded into the smart contract to make tons of new coins to sell for the leading crypto, draining the liquidity pool in the process.
As always, make sure to research and practise due diligence before lending to any DeFi or yield farming protocol.
Popular Yield Farming Protocols
The number of yield farming protocols grows by the day, so it can be difficult to pinpoint which are the best. Five of the most popular platforms for yield farming are Aave, Compound, Uniswap, and Instadapp.Disclaimer: THIS IS NOT FINANCIAL OR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make, and only you are accountable for the results.
Please remember to comment and share if you found this guide useful! Also, let us know what guides you’d like to see next!
100% Success Money Back Guarantee
If our approach doesn’t outperform the overall crypto market during your subscription, we’ll give you a full refund of your membership. No questions asked. For quarterly and monthly subscribers this is applicable once your subscription runs for 6 consecutive months.
Take your next step towards crypto success
$799/year
Get everything you need to actively manage your portfolio and stay ahead. Ideal for investors seeking regular guidance and access to tools that help make informed decisions.
For your security, all orders are processed on a secured server.
What’s included in Pro:
Success Guarantee, if we don’t outperform the market, you get 100% back, no questions asked
24/7 access to experts with 50+ years’ experience
All of our top token picks for 2025
Our latest memecoins pick with 50X potential
On hand technical analysis on any token of your choice
Weekly livestreams & ask us anything with the team
Daily insights on Macro, Mechanics, and On-chain
Curated list of top upcoming airdrops (free money)
Our track record speaks for itself
With over 2.4M tokens and widespread misinformation in crypto, we cut
through the noise and consistently find winning assets.
Frequently Asked Questions
Can I trust Cryptonary's calls?
Yes. We've consistently identified winners across multiple cycles. Bitcoin under $1,000, Ethereum under $70, Solana under $10, WIF from $0.003 to $5, PopCat from $0.004 to $2, SPX blasting past $1.70, and our latest pick has already 200X'd since June 2025. Everything is timestamped and public record.
Do I need to be an experienced trader or investor to benefit?
No. When we founded Cryptonary in 2017 the market was new to everyone. We intentionally created content that was easy to understand and actionable. That foundational principle is the crux of Cryptonary. Taking complex ideas and opportunities and presenting them in a way a 10 year old could understand.
What makes Cryptonary different from free crypto content on YouTube or Twitter?
Signal vs noise. We filter out 99.9% of garbage projects, provide data backed analysis, and have a proven track record of finding winners. Not to mention since Cryptonary's inception in 2017 we have never taken investment, sponsorship or partnership. Compare this to pretty much everyone else, no track record, and a long list of partnerships that cloud judgements.
Why is there no trial or refund policy?
We share highly sensitive, time-critical research. Once it's out, it can't be "returned." That's why membership is annual only. Crypto success takes time and commitment. If someone is not willing to invest 12 months into their future, there is no place for them at Cryptonary.
Do I get direct access to the Cryptonary team?
Yes. You will have 24/7 to the team that bought you BTC at $1,000, ETH at $70, and SOL at $10. Through our community chats, live Q&As, and member only channels, you can ask questions and interact directly with the team. Our team has over 50 years of combined experience which you can tap into every single day.
How often is content updated?
Daily. We provide real-time updates, weekly reports, emergency alerts, and live Q&As when the markets move fast. In crypto, the market moves fast, in Cryptonary, we move faster.
How does the success guarantee work?
If our approach to the market doesn’t beat the overall crypto market during your subscription, we’ll give you a full refund of your membership fee. No questions asked. For quarterly and monthly subscribers this is applicable once your subscription runs for 6 consecutive months.
Recommended from Cryptonary
