You’ve probably heard of Yield Farming, right? It’s the biggest thing in crypto right now. Not long ago, the only ways to generate huge profits were to trade big or invest big. But now, yield farming has provided another avenue to generate sizable returns.
Decentralized Finance (DeFi) has taken off, and yield farming is one of the most prevalent parts of DeFi. Essentially, yield farming is the practice of strategically utilizing DeFi protocols in order to get the best interest rates, and therefore returns, for the money that you’re investing.
Yield farming has been providing those involved incredible interest rates. We’re talking up to 1,000+% APR. Those are rates you’d never dream about receiving in a bank. To be truthful, before yield farming it would have seemed impossible.
However, it’s not all sunshine and rainbows. The growth of yield farming has been good and bad. The good is that more and more yield farming opportunities are appearing. The bad is very closely related to this – the more opportunities there are, the harder it is for the user.
Keeping on top of which protocols offer the best return is tricky and time consuming. Interest rates are always changing, and when more people move into a specific pool they dilute the pool and decrease your share, which reduces your earnings too. Successful yield farmers jump between protocols to avoid this problem, but that’s getting harder and harder to do. Furthermore, with the Ethereum network congestion, it’s getting very expensive too.
It’s not sustainable for someone to be paying $50-100 just to move to another protocol to slightly increase the interest rate they’re receiving. For a whale, maybe, but not for the average user. Even as a whale, these expensive transaction fees add up quickly.
This is clearly becoming a real problem with yield farming. The opportunity is there, but the market conditions and number of options makes it tough to keep your money in the best place. APY.Finance is here to solve these problems.
APY.Finance is a ‘Yield Farming Robo-Advisor’ – but what does that mean? Basically, APY.Finance is a platform built up of advanced smart contracts that strategically route your money through the DeFi ecosystem to get you the best yield farming returns possible when taking into account your risk tolerance. APY.Finance connects with numerous leading DeFi protocols. Their technology is always on the hunt for the best returns available. Note that APY.Finance isn’t currently live, but an Alpha is on the way. It also offers risk-adjusted presets for all your farming needs, to appeal to different risk appetites.
Perhaps the best part about APY.Finance are the fees, or lack thereof. With traditional yield farming you’ll be paying a lot every time you jump between a protocol. With APY.Finance, your fees will be minimal. By routing the funds of many people simultaneously, APY.Finance is able to significantly lower your transaction fees. As the value of funds in APY.Finance increases, the fees you pay will decrease. The team estimates ultimately achieving savings in excess of 99%.
So that means the two main problems of yield farming are solved – lower fees, and no more hunting around for the best yield. APY.Finance can do it all for you.
How does it work?
To get involved, all you’ll have to do is deposit funds to APY.Finance and add to the liquidity pool. You’ll be given APT tokens in exchange, which simply signify how much of the overall pool you own, so you’ll be able to get your money back whenever you need.
Once your money is in, you’ll choose your risk pool and then the money starts bouncing around DeFi protocols to generate you returns. The dashboard is set up to display your effective APY, the smart contracts you’re exposed to and any possible risk factors. These are all things you can’t easily see when yield farming normally.
APY.Finance is designed to account for risk and to spread capital across multiple strategies to reduce risk factor. This is also dictated by the risk level a user inputs at the beginning too.
APY Token and Liquidity Mining
APY.Finance has a token, APY, which is going to be the native token of the platform and will be used for governance.
The APY team have recently launched APY token liquidity mining. Users can now deposit DAI, USDC, and USDT into the APY.Finance liquidity contract and start vesting the APY governance token. In just a few hours after launching this program, more than $60 million was locked in APY.Finance’s contracts.
The APY token will have numerous valuable utilities in the ecosystem from the beginning, with many more to be added as development continues. You can learn all about the upcoming and planned APY utility here.
Yield farming can be very profitable, but also hard to do well. APY.Finance is a new protocol designed to move your money through the DeFi ecosystem automatically, putting it in the best places to generate high levels of return, while keeping the risk to a level you’re comfortable with. The APY token will be the governance token of the platform, and an Alpha of APY.Finance will be launching soon.
*This article has been sponsored. The Daily Chain encourages you to carry out your own research before you make any form of investment and educate yourself about how to stay safe in the crypto space. The above article does not represent financial, investment or trading advice and we do not recommend the purchase of any cryptocurrency or product without consulting a financial aid. The Daily Chain strongly encourages you to do your own research before making any investment decisions.