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Definition: yield farming


Also known as "DeFi farming," and "liquidity mining," cryptocurrency assets are used to generate value for investors who lock up their crypto for returns similar to holding stocks and bonds for dividends and interest. Yield farmers are people who become "liquidity providers" (LPs) by adding their crypto into a liquidity pool on a decentralized exchange (DeX). They earn fees paid by users who borrow and swap tokens on that DeFi platform. See DeFi, decentralized exchange, crypto glossary and cryptocurrency.