Can People Earn In Yield Farm? – Here Is The Ultimate Answer

Can People Earn In Yield Farm? – Here Is The Ultimate Answer

 If in the past, in the field of cryptocurrencies, investors wanted to find a way to increase profits or increase the number of coins held by trading, now there is a new way to help investors quickly increase that amount of coins. It is Yield Farming.

So what is Yield Farming? How does it work?

The following article will help you better understand this term and help you make money with this method in the safest way.

What Is DeFi?
Let’s take a look at the term DeFi Yield Farming. Before getting into more details about Yield Farming, we’ll take apart the term DeFi.

DeFi generally refers to Decentralized finance. Decentralized finance can better be defined by defining its opposite, which is Centralized finance. It’s something that we’re all used to today. Centralized finance means that there is a powerful company or institution at the center of the whole financial transaction. For example, you want a loan from the bank, and you go to the bank. If the people at the bank don’t like your credit, they don’t like your color or where you’re from, you may not get that loan.

One problem about Centralized finance is that there is a centralized organization controlling access to capital and you have to interpret all the rules written and check whether or not you fit those interpretations. In contrast, Decentralized finance is all self-executing programs that exist on the Ethereum blockchain. There is no centralized place where your transactions can be controlled. You can go and get your lending decisions based upon not anyone’s interpretation but whether or not you meet the rules that have been set
up by programs.
This new way of finance is aimed to carry out financial activities such as lending, borrowing, investing in platforms that are decentralized open-source and do not
rely on big institutions.

What Is Yield Farming?
One of the things that exist in the DeFi framework is a type of program called a smart contract, which is pivotal to the function of the whole system. A type of
smart contract is called a liquidity pool from which people can execute Yield Farming.

Yield Farming is the procedure of taking an initial investment to gain an annual interest and you can grow that investment without having to add new money. More simply, it means locking up cryptocurrencies and achieving rewards.

How Does Yield Farming Work?
To better understand this concept we will need to know about the Automated Market Maker (AMM) model. We can mention the popular AMMs like LaunchZone, Uniswap or Pancakeswap. Like centralized exchanges, AMM has many different trading pairs but especially there are no buy or sell orders and traders do not need to look for buyers. Instead of that, a smart contract will work with the role of the creator of the exchange transaction.

Therefore, although there is no need for intermediaries, someone must still create the market and provide liquidity. Those are liquidity providers (LPs). When you want to exchange Usdt for BSCX, you will exchange it with the Liquidity Pool. USD is transferred to the Pool and BSCX will be from the pool to your wallet. When someone else wants to exchange BSCX for Usdt the process is similar.

To understand how such high returns are plausible, you need to understand TVL and liquidity pools, which are the three core elements of yield farming.
Total Value Locked (TVL)
TVL is the total liquidity in liquidity pools, making it a useful metric for measuring the health of DeFi and the yield farming market in general. It is also an effective metric for comparing the “market share” of different DeFi protocols. A pretty good destination for watching TVL is Defi Pulse.

Here you can check which platform has the highest amount of ETH or other cryptocurrencies locked
in DeFi. Accordingly, it can give you an overview of the current yield farming status.

Of course, the more value locked, the more yield farming continues to grow. It is worth noting that TVL can be measured in ETH, USD, or even BTC. Each will give you a different view of the state of the DeFi money market.

Liquidity Pools
These pools allow anyone to stake their assets into them to earn a passive income through interest. The interest is generated from the trading fees imposed upon users who tap into these pools to make exchanges. It is distributed to every liquidity provider based on what percentage of the total pool they provide.

How Is Yield Farming’s Profit Calculated?
Normally, the profit from Yield Farming will be calculated on an annual basis, like the interest rate on a 1-year savings deposit. There are two units of profit measurements that you often see are APY (Annual Percentage Yield) and APR (Annual Percentage Rate). APY takes into account compound interest while APR does not. If so, is there any way to calculate profit from Yield Farming in the short term?

It is quite difficult to estimate the profit from Yield Farming because it is a highly competitive campaign and many innovations as projects try to attract investors to provide liquidity into their protocol. As a result, profit levels can change very quickly and are difficult to accurately calculate in the short term.

Imagine this, when a user provides liquidity for a project, the protocol will use the built-in algorithm to automatically calculate a certain amount of reward. The more people enter Farming, the lower the reward each person receives, resulting in a lower profit from Yield Farming compared to the original.

As a result, after one year, your actual return may not be the same as the APY or APR at the time you provided the liquidity to the protocol, not taking into account the price movement of the original asset.
Risks Of Yield Farming
Everything above may sound amazing, but Yield Farming is fraught with risks. Like anything in this world, the potential for high rewards always comes along with a comparable chance of you losing money. In the case of yield farming, one of the biggest risks comes from smart contract failure. Because the entire field of DeFi is young and still growing, problems can occur. There’s generally always a chance that a smart contract could either fail or have some exploitable imperfection that could lead to a loss of funds.

Moreover, the impermanent loss is another risk you need to be careful of. That term means that you’re always selling off the better-performing coin in exchange for the lesser performing one. However, don’t worry too much if you invest in a good project. In this case, the impermanent loss can still be countered by transaction fees and the part of the token that can be farmed.

Final Thoughts
Yield Farming brings high profits in a short time. This is something that no one can deny about its attractiveness. However, yield farming still has risks such as asset liquidation, hacking because of fragile smart contracts. Therefore, you should be cautious when sending money to DeFi protocols to farm.

There are many opportunities to find a high return rate compared to traditional finance. Despite that, we still have to remember that it is still a very new industry, so it’s full of risks. We hope this article has provided much useful information for you about DeFi and Yield Farming.

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Is Dogecoin (DOGE) a good long-term investment?

Is Dogecoin (DOGE) a good long-term investment?

You can still make money on Dogecoin in 2021!
As this article is being written, DOGE has gained close to 80,000% since its creation, despite the recent large pullback in the market. Price is bound to recover from here as the market moves higher.

You can make money from Dogecoin this year. Many investors have made money lots of money from that coin since it was created and many more will make money this year, even if they are newcomers.

For most of 2021, the overall bias on DOGEUSD is bullish, and while there would be large or minor pullbacks along the way, the market would quickly or slowly recover. Price might reach 1.00 USD and possibly reach 1.5 USD before the end of this year.

There are active crypto traders who make money from DOGEUSD by buying it when the RSI period 14 reaches the oversold region of less than level 30. They also sell the coin when it reaches the overbought territory of the RSI 14 level 70 on the daily chart, raking in huge gains as they ride DOGE price southwards.

Also, investors who buy the current pullback and hold till the end of December 2021, will have nice profits to show for their patience.

At the end of 2021, I would dump Dogecoin completely and convert the gains on it to cash or a stablecoin.
But I won’t hold Dogecoin (DOGE) for the long-term
Most cryptocurrencies are scams because they do not serve unique purposes or solve unique problems. Even certain cryptos that are believed to solve real problems have disappointed investors.

A number of coins which used to be household names and very promising some years ago have now become almost worthless. Some coins/tokens made money years ago, and they lost more than 90% of their value and have not recovered anything since then, even though cryptos generally went upwards in 2020 and 2021.

I will give examples of these coins in another article.

Some experts once thought that coins in the top 50 or the top 100 were to be trusted. Nonetheless, in the last 14 months, a considerable amount of coins got pushed out of the topmost 100; and while certain coins did not get pushed out too far, some coins got pushed too far, even close to the topmost 1000.
Why Dogecoin (DOGE) is not a good long-term investment
But why?

There is no way you can liken DOGE to ADA or ETH. There are huge differences. You can never compare DOGE to BTC. Yes, if one is a gem, the other is paper.

For instance, while BTC has limited/maximum supply by design, about 10,000 units of Dogecoin are created per minute. If Dogecoin reaches the resistance line at $1.00, its total value would be in the region of $129 billion, which will make it the number 3 crypto coin in the word in terms of market cap.

I quote a veteran, professional coach for traders and investors:

“..I personally think that DOGE is probably one of the worst cryptos even though it is currently ranked #5 in market cap. It was formed as a joke, so at least it’s not a Ponzi scheme. DOGE is based upon a meme and has no reason to have any value except that young people think it’s real and important. If you talk to most people in their 20s, DOGE is the only crypto they own because it’s all over social media.

Elon Musk might be brilliant at owning tech companies but he certainly isn’t an authority on investing in other people’s companies. He’s been talking and joking about DOGE lately but I recently learned that he has been working with the DOGE developers since 2019. Could that be more joking? Either way, I don’t trust people who get sued (repeatedly) for tweets that impact the price of their company’s stock (Tesla). Tesla stopped accepting BTC as payment for their cars. It will still keep its large BTC investment even though it burns a lot of electricity. Musk is accepting DOGE payment for his space X project but DOGE is also a proof of work coin that burns a lot of energy too…” – Van K. Tharp, PhD

Please let the fact above sink in.
I also quote Sir John Hargrave of Bitcoin Market Journal:

“What are you buying? You’re buying a joke currency that depreciates in value (10,000 new units of dogecoin minted every minute). It already has a higher market cap than Polkadot, Cardano, and Algorand, which are actual blockchain platforms where people build things. If it gets to $1.00, it will surpass Binance coin, which powers the largest crypto exchange in the world.

To me, it’s clear that Dogecoin is a bubble, fueled by the same kind of meme mania that has driven up GameStop stock. It’s not really an investment, it’s a gamble, and I hate gambling. So I wouldn’t touch Dogecoin with a 10-foot leash, simply because of the tokenomics…”

Dogecoin to collapse in 2022
Dogecoin is doomed to become worthless in the future, starting somewhere in 2022, and investors who don’t cash out by the end of this year will deeply regret it.

To hold coins for a long period of time, do not bet your sweat on tokens that serve no real purposes other people’s fantasies. It is better to stick to cryptocurrencies that have stood the test of time.

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Ernst & Young Invests $100 million into Blockchain Industry

Ernst & Young Invests $100 million into Blockchain Industry

Behemoth accounting firm Ernst & Young Global Ltd. has joined the growing list of large corporations investing in crypto and blockchain technology. The firm announced yesterday that it has invested $100 million into engineering and developing distributed ledger technologies (DLT).

Ernst & Young unveiled its second-generation (G2) smart contract and token review tools using its Ernst & Young Blockchain Analyzer product site, which includes a testing studio for enabling simulated smart contract execution for complex decentralized finance (DeFi) applications. The company noted that:

“The new iteration supports multiple new capabilities that [will get] used in complex DeFi contract ecosystems,” Ernst & Young announced. They also stated, “It offers a blend of compliance testing with traditional code review, and it supports customized smart contract tests and simulation of mainnet transactions.”

Ernst & Young also mentioned that Italy-based beer company, Birra Peroni, utilizes its Ethereum-based supply chain solution, known as the “EU Ops Chain Traceability.” Birra Peroni uses the supply train tracker to verify the information and to mint non-fungible tokens (NFTs) for the identification and monitoring of Peroni beer batches.

Ernst & Young Launches More Blockchain Projects

The accounting firm also revealed that it contributed source code to a zero-knowledge-proof prototype compiler in the public domain. Starlight, Ernst & Young’s latest ZKP protocol, addresses worries over the protection of commercial confidentiality on a shared network.

Ernst & Young, in collaboration with Microsoft and ConsenSys, launched The Baseline Protocol, an enterprise-focused Smart Contract protocol, in March 2020. This protocol takes advantage of the Ethereum network as a middleware while providing adequate security for its network users.

The Baseline Protocol provides a platform for enterprises to transact on blockchains without compromising their data security to network counterparts.

What this means for the Blockchain Industry

With more institutional investment coming into blockchain technology and the cryptocurrency industry, these industries become more demystified and are attracting more investments and mainstream adoption.

 

You can purchase crypto coins here: Buy Coins

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