{"id":8501,"date":"2022-09-28T18:34:21","date_gmt":"2022-09-28T18:34:21","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=8501"},"modified":"2022-09-28T18:34:21","modified_gmt":"2022-09-28T18:34:21","slug":"how-does-yield-farming-work","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/09\/28\/how-does-yield-farming-work\/","title":{"rendered":"How does yield farming work?"},"content":{"rendered":"\n<p>To yield farm, you need assets for which the common types of yield farming apply, the most popular being ERC20 coins. You also need a decentralised wallet to connect to the application, the most popular being browser wallets like Meta Mask or Trust Wallet.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Earning interest on ETH<br><\/h4>\n\n\n\n<p>A simple Yield Farming strategy would be to deposit ETH with\u00a0Compound\u00a0and earn interest. Here are the steps:<\/p>\n\n\n\n<ul><li>Navigate to the Compound App and connect your wallet; this will allow it read your balance<\/li><li>Select the asset you wish to deposit<\/li><li>You\u2019ll see the ETH interest rate &amp; rate at which you\u2019ll earn Compound<\/li><li>Input the amount you wish to deposit &amp; sign the transaction<\/li><li>Signing a transaction will incur a GAS fee which your wallet will show<\/li><li>You will be issued with cETH minted by the Compound Smart Contract in proportion to the ETH deposited<\/li><li>You\u2019ll immediately start earning interest on your ETH deposit &amp; can withdraw at any time<\/li><li>To withdraw your funds just Repay your cETH and sign the transaction with GAS fee.<\/li><li>The proportionate amount of ETH, including the interest earned, will be sent back to your ETH address<\/li><li>You will also earn COMP tokens paid once you return the cETH<\/li><li>You can use the COMP to participate in decisions on how Compoud is run, trade it or deposit it in a pool to gain yield.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Borrowing against ETH<\/h4>\n\n\n\n<ul><li>Navigate to the Compound App and connect your wallet; this will allow it to read your balance<\/li><li>Select the asset you wish to borrow against<\/li><li>You\u2019ll see the interest rate &amp; rate at which you\u2019ll earn Compound<\/li><li>You\u2019ll see the maximum amount you can borrow based on your collateral as a %<\/li><li>Input the amount you wish to borrow &amp; sign the transaction<\/li><li>Signing a transaction will incur a GAS fee<\/li><li>You will be issued with the borrowed asset<\/li><li>You\u2019ll immediately start accruing interest on your loan<\/li><li>To Repay the loan, return the required amount of ETH &#8211; original deposit plus interest &#8211; and sign the transaction with GAS fee<\/li><li>You will also earn COMP tokens paid once you repay the loan<\/li><li>You can use the COMP to participate in decisions on how Compound is run, trade it or deposit it in a pool to gain yield.<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<p>To yield farm, you need assets for which the common types of yield farming apply, the most popular being ERC20 coins. You also need a decentralised wallet to connect to the application, the most popular being browser wallets like Meta Mask or Trust Wallet. Earning interest on ETH A simple Yield Farming strategy would be [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[577],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/8501"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=8501"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/8501\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=8501"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=8501"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=8501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}