Yield Farming Simplified With LYRA

Yield farming has fast grown to become one of the most popular income generators in DeFi. Currently the total locked value of liquidity pools in yield farming projects is over $7.5 billion according to CoinMarketCap.

However, despite its ability to generate huge revenue for investors passively, it also comes with the high risk. The technicalities involved with yield farming make it challenging for beginners.

3Key is bridging that gap with the use of its proprietary AI tech, LYRA to simplify yield farming investments for clients and ensure risks are effectively minimized.

What is Yield Farming?

Yield farming in DeFi occurs when crypto investors lock their digital assets in smart contract liquidity pools as a means of earning passive rewards. It is a form of lending crypto assets to DeFi protocols — in this case liquidity pools with the purpose of providing liquidity for these protocols. The one who provides the crypto asset liquidity in the pool is called the Liquidity Provider (LP). LPs are rewarded in tokens and fees generated over a period of time commonly referred to as yields or Annual Percentage Yields (APY).

Yield Farming Technicalities

The returns or APYs from yield farming are often rather unstable. While the APYs could be competitive all in a bid to attract investors, these rates are usually determined by the pool’s liquidity and crypto assets prices. This means fluctuations in prices would largely affect investments made in the pools. Hence LPs need to actively monitor their real time APY in order to determine whether it makes sense to continue locking up funds in a particular pool. LPs must continuously spot and rebalance their locked funds in yield farming — a big hassle for typical users.

Enter 3Key

One of the strategies 3Key employs to help clients maximize their returns in yield farming is the leveraged yield farming technique. Leveraged yield farming is a technique that allows 3Key to lever up yield farming positions, borrowing external liquidity to maximize returns. As a result of having more liquidity to yield farm, leveraged yield farmers capture a larger share of the rewards.

With the use of LYRA, 3Key performs round the clock monitoring of different DeFi protocols. This ensures that fund allocation is at its most optimal level and returns maximized. 3Key continues to ensure users can access DeFi investments conveniently and at very minimized risks.

Yield farming has its complications and could appear too technical to understand for most investors. However, 3Key takes the burden off the clients’ shoulders by doing all the heavy legwork on behalf, while maximizing yield returns and minimizing risk.