Staking, Yield Farming, and Liquidity Mining Simply Explained
On your journey to the DeFi space, you will run into the common concepts such as staking, yield farming, and liquidity mining, which are basically the solutions to acquire returns from digital assets. This article will help you broaden your understanding about these terms, as well as provide you with the methods to make profit with such models in Rikkei Finance.
Staking is the process of building digital assets as collaterals for blockchain networks that leverage the Proof of Stake (PoS) consensus algorithm. With staking, you can authenticate transactions in a network and get rewards in native tokens, as the more assets you stake, the more blocks are generated in the blockchain. Therefore, the higher you stake, the higher rewards you’ll get from the network.
There are numerous ways that staking could support different crypto and DeFi platforms. Let’s look at Ethereum as an example.
Ethereum 2.0 is markedly shifting from a Proof of Work (PoW) to the Proof of Stake model. Validators (network nodes verifying every transaction) are required to stake parcels of 32 ETH so as to authenticate the transactions on Ethereum ecosystem and get their block rewards.
On other centralized protocols including Coinbase, BlockFi, etc. Investors are allowed to stake their digital assets to receive a certain amount of interest paid by the creditors; this system is equivalent to commercial banks enabling customers to deposit and lend them out to those who seek for credit.
Yield Farming is the process of locking digital assets in the blockchain protocols so that investors could earn for yield in return by utilizing Automated Market Makers (AMM). Farmers search for the utmost yield on their assets and transition among pools to bolster their earnings.
Yield farming plays a vital role in the whole DeFi ecosystem because it adheres to the DeFi platforms’ foundation that allows the procedures of exchange and lending services. With yield farming, rewards are distributed in the form of APY locked in by the number of participants.
Liquidity Mining is the process of adding digital assets to the liquidity pools of DeFi protocols applying Smart Contracts and Liquidity Providers. Considered one of the most vital elements in the success of DeFi, as well as an efficient mechanism for building up liquidity, liquidity mining requests participants to supply their digital assets into DeFi protocols’ pools with the aim of trading crypto. Similar to yield farming which is a subset of staking, liquidity mining is a subset of yield farming. However, what’s different is liquidity providers are compensated with both the fee revenue and the platform’s own coin. Provided that tokens supplied by an user remain in the liquidity pool, users are able to receive their rewards in form of Liquidity Provider, LP tokens and Governance.
Rikkei Finance helps users maximize their profit by utilizing the 3 methods
At Rikkei Finance, you are able to participate in the farming process through various investing opportunities: Liquidity Mining, TITA Farming Vault, RIFI Farming Vault, and Double Farming Vault.
Yield Farming is an innovative DeFi concept where users stake or lend their crypto assets, providing liquidity in order to receive returns. After launching the mainnet of lending protocol, Rikkei Finance is running a liquidity mining campaign on BNB Chain. In this campaign, both lenders and borrowers could earn reward by supplying and borrowing assets from lending pools.
Staking is supported once you make your decision to join our vaults, which helps you be protected from market fluctuations, boost your earnings and diversify your assets efficiently. Rikkei Finance currently offers users 3 ways of earning profits with our Farming Vault system:
Titan Hunters is an MMORPG game with an incredible voxel graphic style, and a simple but addictive gameplay. Rikkei Finance and Titan Hunters have formed a strategic partnership, and launched this vault as a special event. You are enabled to stake $RIFI to earn $TITA at https://apps.rikkei.finance/vault/tita on Binance Smart Chain.
The program is the foundation of providing liquidity for RIFI lending pools in the future. We will deposit tokens staked in Double Farming vaults to the Venus protocol. The vault is now available at https://apps.rikkei.finance/vault/busdv. Participants can rest easy as they will bolster their earnings and diversify their assets effortlessly by receiving not only BUSD but also XVS and RIFI in return.
This Farming Vault enables users to participate in the farming process by staking RIFI to earn RIFI. Rikkei Finance does not lock deposited tokens, which means users can unstake their tokens at any time with a fixed 15% APY, and there’ll be no vesting schedule.
Users are capable of maximizing their profit by making deposits in RIFI lending, then borrowing, and supplying. You can do this in a cyclical process until you cannot borrow or supply as it reaches the borrow limit.
Please stay tuned for our soon-to-be-released vaults with GREAT APY in the future!
Disclaimer: The information herein is for educational purposes only and should not be considered financial, investment, or trading advice. Please conduct your own research and due diligence before making investment decisions. You understand that you are using the Information provided at your own risk.