With the recent boom in metaverse and meme coins, it seems yield farming projects have faded into oblivion. With the “DeFi summer of 2020” coming to an end, yield farming still remains one of the most popular ways to earn rewards from your crypto.
If you are unfamiliar with yield farming, you can make money from your existing cryptocurrency by lending your cryptocurrency and using it in liquidity pools. There are a variety of popular yield farming options, and in this article, we’re going to examine our top 5 projects with great prospects for 2022. The list below is ordered by market capitalization, from 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 and essentially acts as a competitor to Uniswap. However, unlike Uniswap, Curve DAO is designed to swap ETH to stablecoins like USDC, DAI, etc. Additionally, Curve is able to swap the tokens for less fees as it rewards its users in CRV instead of charging swap fees.
CRV holders can use their coins 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 prospects of this project are extremely optimistic.
Compound #4 (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. Additionally, Compound rewards users for interacting with their platform in the form of COMP tokens, further energizing 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 are 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 depositing and borrowing their assets. At the time of writing, over $26 billion in assets are plugged into 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 discounts on fees, voting rights for governance, and a variety of other benefits.
When it comes to yield farming, it’s not surprising that multiple pools of liquidity work together. Looking at the assets available on Aave, Compound is the highest earning asset – with an APY of 6%.
Aave is one of the top contenders when it comes to yield farming, and with over $26 billion in locked assets, it’s a great option if you’re looking to earn interest on your existing cryptocurrency.
#2 PancakeSwap (CAKE) – $4.4 billion
Unless you’re new to the crypto world, you’ve probably heard of PancakeSwap. It is the most popular decentralized exchange on the Binance Smart Chain with over $1.7 billion in trading volume in the last 24 hours.
Users can leverage Yield Farm with PancakeSwap by providing liquidity to the platform. In return, users will receive LP (Liquidity Pool) tokens, which can be converted into CAKE or another cryptocurrency.
Not surprisingly, since PancakeSwap is one of the most popular decentralized exchanges, it is also one of the most valuable yield farming coins. PancakeSwap’s popularity keeps growing, making it a great project for 2022.
#1 Uniswap (UNI) – $14 billion
The king of all DeFi exchanges is Uniswap, the number one decentralized exchange on the Ethereum network. It currently boasts over $3 billion in 24-hour trading volume across its 3 different versions.
For those confused as to 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 through their online portal using the pool option. The process is similar to PancakeSwap except that it takes place on the Ethereum network.
As the leading decentralized exchange, Uniswap is a great long-term project.
Conclusion
Yield farming can be a great way to make money from your existing cryptocurrency. Note, however, that yield farming produces the highest returns when an asset is trading sideways. Therefore, it is best to use Yield Farm when you believe the assets will trade at the same level without large price movements.
Overall, yield farming is a great example of some of DeFi’s best tools. If you are interested in learning more about DeFi, yield farming is a great way to get your foot in the door.
Also read:
Top 5 Metaverse Coins with Fully Functional Apps to Watch in 2022
Disclosure: This is not trading or investment advice. Always do your own research before buying any cryptocurrency.
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