Yield Farming

(v1.0)

Yield farms are another novel concept that originated in DeFi and have since become integral to the ecosystem, especially for Automated Market Makers (AMMs) such as DeepSwap. Combined with liquidity pools, yield farms offer yet another way for users to stack yield.

Yield farms utilize $DEP Liquidity Provider (DLP) tokens, which are given to liquidity providers (LPs) when providing liquidity to a pool. These DLP tokens represent a LP’s portion (in percent) of a specific pool and can be “staked” in a yield farm. LPs that choose to stake their DLP tokens in a farm earn additional $DEP rewards on top of the swap fees that are already accruing. Of course, DLP tokens can also just be held after LPing as well to accumulate the swap fees only - yield farms are simply an additional way to make more money on the liquidity an LP has provided.