High Yield Farming: Top Strategies to Multiply Your Crypto

A Closer Look at Yield Farming

The dictionary definition of yield farming is “the process of depositing cryptocurrencies into DeFi protocols to earn rewards, including governance tokens, stablecoins, and even shares of the platform's fees”. In other words, it’s like earning interest on a savings account, but with potential for much higher returns.

How Does Yield Farming Work?

Yield farming is essentially providing liquidity to DeFi platforms. When you deposit your crypto into a liquidity pool, you enable others to trade those assets, and in return, you receive a share of the trading fees generated. Some protocols also offer incentives in the form of governance tokens to encourage participation.

Here are the different types of yield farming:

• Lending: Lend your crypto assets to others and earn interest on the loaned amount.

• Borrowing: Use your assets as collateral to borrow other tokens, which can then be used for additional yield farming opportunities.

• Providing Liquidity: Contribute your assets to a DEX to facilitate trading, and earn a share of the trading fees.

• Staking: Lock up your tokens for a specific period to support a network, and earn rewards in the form of new tokens or transaction fees.

The Current Scenario

Traditional yield generation methods currently available in the crypto market face significant hurdles:

• Limited Yield for Non-Yield-Bearing Tokens: Lending platforms offer low returns, especially for assets that don't inherently generate yield.

• Market Saturation: High liquidity and low risk associated with major tokens leads to saturated markets. The abundance of supply quickly meets demand, driving down potential returns.

• Challenges with Automated Market Makers: AMMs require users to provide liquidity in pairs, which could lead to impermanent loss (loss incurred to change in asset value) and capital inefficiency (failure to reach potential return on investment).

When faced with these issues, the Multipli team had just one thing to say:

How Multipli factors in

Multipli addresses the challenges outlined above by generating sustainable yield through risk-free arbitrage strategies. It also leverages derivatives and synthetic assets to optimise capital efficiency and exploits funding rates and price differentials for profit.

The Multipli platform is designed to be intuitive, even for beginners, so you can start maximising your yields without a steep learning curve.

You could say that Multipli is to yield farming what sprinkles are to ice-cream - it makes a good thing even better!

Multipli is designed to help you optimise your yield farming strategy, using its advanced features and user-friendly interface to:

• Diversify your portfolio: Spread your ventures across multiple DeFi protocols to reduce risk.

• Automate your farming: Set it and forget it with Multipli’s smart contract-based automation.

• Maximise your profits: Benefit from Multipli’s algorithms that constantly seek out the best yield opportunities.

If the info dump is making your head spin, take a look at these hypothetical scenarios to better understand how we are able to provide superior yield using time-tested strategies.

The Final Question

Whether you want to go over it again or you didn’t quite get it, our docs are your best course of action - it goes over the high-level architecture, clarifying without condescending.