Yield Farming coming to Bitshares?
Yield Farming is a hot topic in the crypto-sphere and for good reasons too it was responsible for the growth of the defi sector from $500million to $10billion in 2020… It involves the process of either staking, or providing Liquidity to a pool or group of pools in the hope of getting high returns in the future.
Total Value Locked
The total value of money locked in defi now currently stands at $236 Billion, this shows that it is a growing industry and requires a lot of attention from crypto-users. On platforms like ethereum, Binance, Polygon, etc, yield farming has grown in use from lending, crowdfunding, liquidity pools to IDOs and NFTs.
How Yield farming Works
The basic underlay of yield farms is that they give a portion of the profits they make either in the form buy backs, token burns, market fee rebates, or as interest accrued.
The yield farms use a special protocol that enables them maximize their returns on the market, by moving funds around the most profitable pools.
Most Yield farms start out as either liquidity providers or lending platforms; Liquidity providers include curve finance, pancakeswap, uniswap, sushi swap, 1inch exchange, crystl finance, etc. While the lending types include yearn finance, aave protocol, Venus, oasis, Liquity, etc.
Projects that are Yield Farming on Bitshares
On Bitshares there is no clear distinction whether yield farms exist or not, however liquidity pools do exist for a variety of assets and some private liquidity pool owners like CRUDE Finance offer incentives for staking to their pool or for holding their governance tokens.
One of the most recognizable entity that practices something close to yeild farming on the Bitshares DEX is the XBTSX exchange.
They have a staking program (smartholdem Staking) and robust liquidity pools, however their direct incentives are only meant for those who have staked their governance token STH (minimum of 100,000STH) i.e they only offer a staking reward.
True yield farms always have a specific APY or APR percentage return they offer and there is no limits to the amount that can be deposited to the pools or staked in the contracts.
Apart from XBTSX no other major Bitshares brand is more interested in yield farming than CRUDE.ASSETS. They have a robust liquidity pool and offer incentives (up to 300% APY) for staking to their stablecoin pools, holding their reward token LVRG and for borrowing their Leveraged assets.
That being said will Bitshares see an influx of yeild farming protocols in the future? The answer depends on if the upcoming Bitshares 6.0 protocol update will work as intended and with all the promising features it has like flash loans, lending pools, etc in no distant time yeild farming protocols may soon exist on the Bitshares.