Blockchain technology is solving a lot of problems across multiple sectors of the global economy and, apparently, starting a meme gold rush (Source: NBCNews) on the sidelines. But do you ever wonder if there is anything that blockchain can never do? Create liquid assets. The very process of selling a token implies an existence of a counter-party who is willing to buy. Compared to selling stocks or bonds, trading a crypto asset is a lot like selling a house, where it is harder to find a buyer (depending on the coin, of course). More precisely, the illiquidity of crypto assets affects how fast they can be bought or sold at a stable price. To create a liquid asset, you’ll need a promising Dapp, a reputable chain, and a cult-like following. In other words, it is a time-consuming, difficult balancing act. Enter, yield farming. Yield Farming is, quite simply, letting your hard-earned money work for you. It’s no different than owning a savings account. The DeFi puts your money in a money pool, and earns profits by charging interest from these loans. The loans are used for market speculation, which in turn promotes liquidity. A smart contract exists to ensure everything remains in check and no value is lost. After all, you are not providing liquidity out of the goodness of your heart, but for stable returns. A popular quote among compound investors is that money makes money, and the money that makes money makes more money. That’...
