3. NFT Yield Farming
NFT DeFi Main Project #3
Last updated
NFT DeFi Main Project #3
Last updated
Yield farmers use the ARTi NFT DeFi platform to optimize the return of their staked NFT assets. The ARTi NFT DeFi platform offers a variety of incentive returns and interest from a liquidity pool.
Yield Farmers and most protocols and platforms calculate expected returns as an Annual Yield Percentage (APY). APY is the rate of return earned in one year for a particular investment. Compound interest, which is calculated periodically and applied to the amount, is reflected in APY. In addition, revenue is obtained in the form of protocol tokens and is subject to volatile price fluctuations.
Yield farming is the practice of staking or lending crypto assets in order to generate high returns or rewards in the form of additional cryptocurrency. This innovative yet risky and volatile application of decentralized finance (DeFi) has skyrocketed in popularity recently thanks to further innovations like liquidity mining. Yield farming is currently the biggest growth driver of the still-nascent DeFi sector, helping it to balloon from a market cap of $500 million to $10 billion in 2020.
In short, yield farming protocols incentivize liquidity providers (LP) to stake or lock up their crypto assets in a smart contract-based liquidity pool. These incentives can be a percentage of transaction fees, interest from lenders or a governance token (see liquidity mining below). These returns are expressed as an annual percentage yield (APY). As more investors add funds to the related liquidity pool, the value of the issued returns decrease accordingly.
At first, yield farmers staked ARTI coins and offer governance tokens for so-called liquidity mining. Tokens are farmed in these liquidity pools, in exchange for providing liquidity to decentralized exchanges (DEXs).
Liquidity mining occurs when a yield farming participant earns token rewards as additional compensation, its governance ARTi token, to its platform users.
Most yield farming protocols now reward liquidity providers with governance tokens, which can usually be traded on both centralized exchanges like Binance and decentralized exchanges such as PancakeSwap, or Uniswap.
PancakeSwap is a DEX built on the Binance Smart Chain (BSC) network to exchange BEP20 tokens. PancakeSwap uses an Automated Market Maker (AMM) model where users trade with a pool of liquidity. The Arti NFT Defi platform is collaborating with PancakeSwap in areas such as NFT collectibles and games.
