An overview of Yield Farming on Binance Smart Chain
Cryptocurrency and Bitcoin have been hot topics for the past few years. The profits investors earn from the popular cryptocurrencies have been attracting several people around the world. With the increasing popularity of cryptocurrencies, several terms are emerging that may confuse beginners. Yield farming may be one of them.
What is Yield Farming?
Yield farming is a process that makes use of decentralized finance (DeFi) to improve profits. Users borrow and lend cryptocurrencies through a DeFi platform and earn profits as cryptocurrencies for the services they provide. Yield farmers make use of the best tactics available to make maximum profits.
Yield Farming on Binance Smart Chain
Binance is one of the most popular crypto exchanges in the world. They are now trying to expand their impact on DeFi with their Binance Smart Chain. Binance Chain is a service already offered by the exchange for Ethereum compatibility and smart contracts.
What is a BNB Chain?
BNB Chain is a blockchain service that was founded in September 2020. It helps developers to create decentralized apps with smart contracts. Binance Chain couldn’t offer this functionality. BNB Chain was particularly designed to offer fast transactions and to expand the existing capabilities and features. Developers can build decentralized apps using BNB Chain in the ecosystem of Binance Chain that will offer great opportunities for creating DeFi services and products.
How does yield farming on Binance Chain work?
There are a lot of options for people who are looking to farm in the Binance Chain. Backerywap, ApeSwap, PancakeSwap, and Venus Protocol are some of the famous protocols. Before yielding a farm, you have to decide which farms to enter. Farms will be shown directly on a page in the protocol. It is better to choose popular tokens as they will have a strong ecosystem and the risk chances will be lower.
Connect with your wallet
Now you will have to connect your protocol with your wallet. For the protocols you choose, there will be different wallets available. After choosing the wallet, create a Binance Smart Chain on the wallet you have chosen. After setting up, you can connect to the work.
Before locking liquidity for your yield farming, it is good to distribute your capital among the two chosen tokens for farming. There will be a token swap option to convert your money into tokens you wish for. There will be a Trade page where you have to choose an exchange and then swap the assets you own into the two tokens you have selected to farm. Until the transaction is completed, you have to wait to get to the next step. But as Binance Smart Chain is ultra-fast, it won’t take much time.
After this, you have to add liquidity. Click the Liquidity option and give the number of tokens you want to stake and choose Supply. After that, Confirm Supply in the pop-up that appears and approve the transaction. Now you have given liquidity and you will have both your liquidity provider tokens with you and they will confirm your deposit.