The cryptocurrency market has suffered a heavy downturn over recent months, with January seeing losses of as much as 45% off total November highs. With this uncertain market, many people are turning to alternative methods of making money with cryptocurrency. While accruing value by holding has been the preferred mechanism of earning with crypto, methods like staking and yield farming have quickly become mainstream within these communities.
DeFi is a $95 billion ecosystem, with more and more users flocking to decentralized finance every day. With the movement towards this system, decentralized exchanges have been racing to develop innovative systems that can help support users and developers alike.
Within this article, we’ll be exploring these decentralized exchanges, touching upon liquidity pools, and demonstrating how Pangolin is innovating the yield farming space. Let’s get right into it.
What Are Decentralized Exchanges?
A DEX, which stands for decentralized exchange, is a trading platform that focuses on blockchain assets, particularly cryptocurrency. Instead of traditional or centralized systems, a DEX avoids any form of middle-man. Instead, they use smart contracts to allow assets to be bought, sold, or traded.
Many of the largest DEX platforms, like Uniswap and Sushiswap, use AMMs (Automated Market Makers) to run smoothly. These replace centralized aspects of finance and automate trades instead of going through a central system.
With the speed of AMMs, decentralized exchanges have given way to new forms of using cryptocurrency to leverage additional currency. Two of these, yield farming and staking, have become incredibly popular in recent years, providing DEXs with liquidity while also affording users a passive stream of income.
A user will buy a certain amount of cryptocurrency, and from there, they’ll be able to stake their purchase (or a part of it) on the DEX to receive additional currency back over time. Most commonly, DEX platforms will organize that their native token is given back to the stakers, providing a direct incentive to stake on the exchange.
What Is Yield Farming?
Within DeFi platforms, yield farming is the act of lending a platform cryptocurrency then earning interest on what you’ve lent. DEX platforms need liquidity pools to facilitate lending, borrowing and trading across all their functions. Without this liquidity, their platforms couldn’t function.
You’ll receive a daily interest figure by contributing to these liquidity pools. Especially as cryptocurrency is currently experiencing major swings up and down, providing liquidity to these platforms is a great way of earning some profit from your cryptos that are gathering dust in your wallet.
Depending on the particular liquidity pool you join, the rewards you receive and the interest percentages will vary. Yield farming is the practice of searching for the very best deals, finding high percentage rates and impressive returns.
How Does Avalanche Fit Into This?
Avalanche is a layer-two blockchain system that focuses heavily on supporting developers of decentralized finance. Within this system, there are multiple opportunities for staking, yield farming, and joining liquidity pools due to the high scalability of this ecosystem.
Due to these benefits, Avalanche is currently the go-to ecosystem for those looking to find high yields with low trading fees. Many DeFi applications have been launched from within this platform that directly focuses on cultivating these positive aspects of Avalanche.
One of these Avalanche-based DEX systems is Pangolin, which has reached highs of over $470 million USD of assets locked into their staking pools. One of the central factors that pull users to Pangolin is their Super Farm program.
While typical yield farming programs focus on giving those that provide liquidity one token for their investment, Pangolin’s Super Farms offer up to ten – at the same time. Instead of just receiving interest in the native token, Pangolin affords liquidity investors a range of different tokens paid out from their pools.
Alongside the native token of $PNG, a user can expect to receive several other tokens based on cryptocurrencies related to the pool. Pangolin has been attracting customers around the globe, especially those looking for an innovative way of maximizing the yield from their cryptocurrencies.
When accessing Pangolin, investors can add their cryptocurrency to several different pools at once, radically boosting the potential returns they would get on a traditional DEX liquidity program.
To put it simple, Pangolin’s Super Farm structure is revolutionizing yield farming for the average investor.
How Is Pangolin Attracting Developers?
One of the driving factors that is bringing developers with their new cryptocurrencies to Pangolin is that they can add an unlimited number of tokens to a pool.
If they see a project pool they’re interested in, a developer could add many of their new tokens into the pool – if Pangolin approves them. Due to this, developers are flocking to this platform as it provides a fantastic way of gaining exposure for the coin they’re trying to launch.
Instead of promoting their coins through traditional approaches, developers can leverage Pangolin to give users their tokens from all around the world. With this concept, both developers and investors are set to gain from these super farm pools, helping ensure the longevity of this platform.
Not only does a developer get a dramatically increased amount of marketing from the pool when compared to other DEX platforms. But an investor is also set to experience a much higher average yield rate as they’ll be getting a yield from more than one currency at once.
This symbiotic system revolutionizes yield farming, providing everyone with a win-win solution.
How Do I Get Involved with Pangolin Super Farming?
Within the Pangolin Exchange, you’ll be able to connect your crypto wallet, setting up an easy way of depositing your cryptocurrencies into the liquidity pools.
Once connected, you’ll be able to navigate to the Farm section of the platform to see all of the currently available farms. Be sure to toggle the option for Super Farms ‘On’ to see the current pools offering multiple tokens.
Next to a liquidity pool, you’ll be able to see the Swap Fee APR, Super Farm APR, and Total APR rewards that you can expect to get from investing within a certain liquidity pool. From there, you should do your research about the success of specific cryptocurrencies and then start to invest in the liquidity pools that you align with.
Instead of having to search through famous DEX changes for singular crypto APY returns, you’ll be able to start earning more than one crypto at a time based on your investments, significantly boosting your potential farming returns.
Due to the initial success of these Super Farming projects, Pangolin is now continually releasing new liquidity pools that people can get involved with. If you refresh the Farms page each week, you’ll notice other pools have materialized during the week.
If you want to stay ahead of which pools are opening and when, you’ll be able to follow the Pangolin Twitter account, which tweets out about upcoming pools before they are released. Doing this will help you stay one step ahead of your fellow investors and ensure you are always there as soon as the pools open.
Yield farming is a valuable way of making your cryptocurrency work for you, allowing it to passively generate an income in the background. Despite the highs and lows that the cryptocurrency market is currently experiencing, a yield program will allow you to generate a daily return on your crypto, building it up over time without hassle.
Instead of leaving your crypto in your wallet and doing nothing, use these moments of the crypto downturn to ensure that you maximize your yields. While yield farmers are already using DEX platforms to provide liquidity, Pangolin represents the next step in boosting yields.
The ability to gain up to 10 tokens from a liquidity pool instead of just one, we should all be keeping an eye on this Avalanche-based platform over the coming months.