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Cryptography

What is Yield Farming?

Yield Farming A DeFi investment strategy in which users allocate crypto assets to liquidity pools or lending protocols to earn variable returns, typically in the form of additional tokens or protocol incentives.

Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework

How is “Yield Farming” Used in Practice?

Yield farming allows portfolio managers to optimize returns by allocating assets to high-yield DeFi protocols, but exposes them to protocol, liquidity, and smart contract risks.

Certification Exam Relevance

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Who Needs to Know This Term?

  • Financial Analysts
  • Bankers
  • Traders

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Frequently Asked Questions

What is Yield Farming?

A DeFi investment strategy in which users allocate crypto assets to liquidity pools or lending protocols to earn variable returns, typically in the form of additional tokens or protocol incentives.

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