🔖
How to do liquidity farming and what risks it entails?
Liquidity Mining consists of providing your tokens to a liquidity pool in exchange for income.
✔️ How does it work?
You provide tokens in a pair (for example, USDC/ETH) to a pool on a DEX.
You receive rewards in the form of tokens from the protocol or commissions from trades.
Risks:
Impermanent loss: temporary loss when the price of one of the assets changes.
Contract hacking: the protocol can be hacked and you may lose all your funds.
Drop in the reward token price: your earnings may depreciate.
Farming can be profitable, but it requires a good understanding of its mechanics and evaluating the risks.
⬇️⬇️⬇️
There is a lot of useful content for beginners on this channel! 📚
Explore and check the posts — each one is a step towards success!
If you like these educational posts, leave a reaction 🔥.
