MODULE 3 - Dan Pentagram
📚 Advanced Cryptocurrency Course: Lesson 3 - Advanced DeFi: Yield Farming and Liquid Staking 🌾
😀👍Now that you know the basics of DeFi, it's time to dive into advanced strategies to earn yields from your cryptocurrencies. Two of the most popular are Yield Farming and Liquid Staking.
Yield Farming
🚜 Yield Farming is a strategy where investors lend their cryptocurrencies to DeFi protocols to earn yields. By "lending" your tokens, you provide liquidity for others to trade, and in return, you receive a percentage of the platform's fees and often additional tokens from the protocol itself. It's a way to maximize your assets, but it also carries risks, such as "impermanent loss" and vulnerability to hacks.
Liquid Staking
🌊 Liquid Staking is an innovation that allows you to reap the benefits of Staking (validating transactions) without having to lock up your funds. By participating in Liquid Staking on a protocol like Lido, you receive a representative token of your original cryptocurrency (for example, stETH for ETH). This "liquid" token can be used on other DeFi platforms to generate additional yields, while your original tokens continue to earn rewards through Staking.
These strategies are complex and require a deep understanding of how DeFi protocols work. It's crucial to thoroughly research each platform and start with small amounts.
— Dan Pentagram