How does it Work
How Yield Farking Work?Yield farmers, and most protocols and platforms, calculate the estimated returns in terms of annual percentage yield (APY). APY is the rate of return gained over the course of a year on a specific investment. Compounding interest, which is computed on a regular basis and applied to the amount, is factored into the APY.
Since the DeFi summer of 2020, yield farmers have been chasing eye-opening thousand percent APYs. However, these protocols and coins may be highly risky and susceptible to rug pulls. Furthermore, the yield is earned in the form of protocol tokens, and is subject to highly volatile price swings.