Sui Name Service (SuiNS) enables blockchain users to register human-readable web3 names, ensuring secure, seamless transactions and a user-friendly on-chain identity.

Some people have no trouble remembering new cell phone numbers, and there are even a select few among us who wouldn't find it hard to memorize a 16-digit bank card number. However, very few people would choose to tackle the job of reliably recalling an alphanumeric blockchain address. Network addresses on 

 (ETH) are 42 characters long, while on the 

 (SUI) blockchain they span 66. These complex and length addresses are virtually impossible for most users to remember, and are among the least user-friendly features of 

 networks. Not only are long blockchain addresses distinctly user-unfriendly, but they also lead to many instances of wrongly executed transactions due to incorrectly input characters. 

Sui Name Service (NS), a solution on the Sui blockchain, has been specifically designed to tackle this problem. The service allows users to create human-readable and easy-to-remember web3 names linked to their underlying blockchain addresses. Using SuiNS, you can transact within web3 using your preferred username and, optionally, an avatar, rather than a long, complex blockchain address.

 (NS), or simply SuiNS, is a decentralized naming service that allows you to create and use a human-readable, user-friendly web3 handle to interact with the blockchain environment, instead of using a typical long and complicated network address. 

At the underlying level, your SuiNS name is linked to your blockchain address, but all the interaction and operations on the chain happen via your registered name.

SuiNS was first conceptualized and launched in 2022, inspired by the popular 

 (ENS). In many ways, SuiNS and ENS are similar, the obvious difference being that each one applies to its own respective blockchain environment. In May 2023, SuiNS was introduced on the Sui blockchain's newly launched mainnet. The service was developed and is supported by Mysten Labs, the development studio behind the Sui blockchain project. Since the beginning of the Sui blockchain's conceptualization, SuiNS has been among the core projects of the entire Sui ecosystem. As of late November 2024, SuiNS has managed to achieve the remarkable milestone of having registered nearly 330,000 names.

Using SuiNS, you can register your preferred username (as long as it's not been taken) for one year by paying a registration fee, currently charged in SUI coins. The name can be renewed at expiration for up to five years. All interactions with the blockchain environment through your wallet use your preferred username, rather than your blockchain address.

SuiNS names can be between 3 and 63 characters. Users can check the availability of their preferred handle and register it using the 

, where a lookup textbox is prominently displayed. Shorter names cost more than longer handles. As of the time of this writing (Nov 21, 2024), a three-character-long name costs 500 SUI ($1,785) and a four-character name will cost 100 SUI ($357), while names with five or more characters are priced at 20 SUI ($71.40).

A SuiNS name can only be registered for one year, but it can be renewed for up to four years (excluding the initial registration year). There's a 30-day grace period after the expiration of your SuiNS name, during which you may still renew it. If you don't renew during the grace period, your registered name will be up for grabs by anyone on the market. Optionally, you can buy an NFT avatar linked to your SuiNS name.

 (DApp) ecosystem on the Sui blockchain. Developers can use off-chain remote procedure calls (RPCs) to integrate the Sui service into their application environments. They can also take advantage of the native, on-chain SuiNS SDK to interact with the service.

Thanks to SuiNS, you can enjoy short, comprehensible names for your own address, as well as the addresses of the parties with whom you transact (if they also sign up for the service). No more forgettable string combinations that are hard to read and virtually impossible to remember!

However, a SuiNS name isn't just a tool of convenience. It also represents your decentralized identity on-chain. The identity is fully owned by you, the user, rather than by a centralized entity.

SuiNS minimizes the likelihood of lost assets due to sending funds to the wrong address: short, easy-to-remember names are way less prone to incorrectly executed transactions than standard blockchain addresses.

Security is also among the benefits of SuiNS. The service runs on the Sui chain, which prides itself on developing and enforcing high-grade security standards. Among these are 

, a framework that maintains a list of malicious websites and on-chain assets, thus protecting the Sui ecosystem from 

 launched by these known nefarious entities.

The SuiNS service launched its native token, NS, on Nov 14, 2024. Initially, NS is envisioned to support 

 processes on the platform, and will also be used for purchasing and trading SuiNS names. Currently, names are traded using SUI, the blockchain's native cryptocurrency. It's likely that NS will replace SUI in this capacity in the near future. The project team has also hinted that there could be additional uses for the NS token beyond governance and payment for SuiNS names. More announcements on this issue are likely to follow.

During the initial phase of the token's existence, governance will be its most prominent function. Holders of NS will be able to vote on important issues concerning the protocol's rules and future direction. One NS equals one vote, with more NS tokens giving you a greater say in the overall decision-making process. You can also increase your voting power by locking your NS tokens for from one to 12 months. For every additional month locked, you obtain 10% voting power. To encourage voting, 5% of the NS token's supply has been allocated for governance rewards. NS is a 

 token, with a total and maximum supply set at 500 million. The token's supply distribution shares are per the chart below.

NS is available on Bybit's Spot market as a swap pair with USDT (

). You can also take advantage of Bybit's campaign dedicated to the token to grab a share of the 

. Three campaign events for eligible users run through Nov 27, 2024, 8AM UTC:

Thanks to Sui Name Service, interacting on-chain has become easier and more user-friendly. However, easy-to-remember names aren't the only benefit: advantages also include lower likelihood of lost funds, better security and a completely decentralized, user-owned identity on-chain. So far, around 330,000 names have been registered, and with the impressive suite of benefits, expect this number to grow as we move with SuiNS into 2025.

Intermediate

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Sui Name Service (NS): Your On-Chain Identity Made Simple

The cryptocurrency market is witnessing an influx of speculative trading, particularly with meme coins like DOGE, PEPE and BONK experiencing extraordinary gains. 

November 2024 has marked a significant milestone for Bitcoin, with its price soaring to $94,105. This unprecedented growth has been driven by global events and heightened social media discussions, with predictions of six-figure valuations. Historically, peaks in social media chatter often precede market corrections, signaling traders to exercise caution. Currently, while whale accumulation remains strong — with wallets holding over 10 Bitcoin adding 53,006 more BTC in just one month — retail traders remain surprisingly cautious. This wary sentiment contrasts sharply with the bullish behavior usually seen during price surges, suggesting a potential correction.

The cryptocurrency market is witnessing an influx of speculative trading, particularly with meme coins like DOGE, PEPE and BONK experiencing extraordinary gains. Despite their volatility, these tokens reflect a broader appetite for high-risk investments. Notably, whale investors holding 1M–100M DOGE are accumulating, while smaller holders are selling, creating conditions for potential breakouts. However, if new capital stops flowing, these speculative assets could face significant downturns. Additionally, while discussions around Bitcoin reaching $100K are increasing, they haven’t reached the levels seen earlier this year, indicating that fear of missing out (FOMO) may not yet be fully realized.

Institutional Interest and Ethereum's Resurgence

Demand for Bitcoin ETFs has surged, with daily trading volumes hitting a record $8.21 billion, signaling increased institutional interest. This activity often coincides with market peaks, but could also indicate new investments flowing into the crypto space. Meanwhile, Ethereum has also gained momentum, breaking above $3,100 for the first time in over 14 weeks. Additionally, whale accumulation is on the rise, suggesting that as Bitcoin leads the market, profits may soon be redirected into Ethereum. In contrast, Solana's price movements remain highly sentiment-driven, with funding rates indicating potential entry points for investors. Overall, altcoins are experiencing growth, particularly following the U.S. elections, which have reignited optimism in the crypto market.

Advanced

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Bitcoin's Resurgence: Analyzing Market Dynamics and Speculative Trends in November 2024

Crypto market makers play a crucial role in providing liquidity by consistently placing buy and sell orders. Learn more about how they work here.

The cryptocurrency market is notorious for its high volatility and sometimes low liquidity, making it a challenging environment for traders and investors. Executing trades can be difficult, often resulting in significant price 

Market making is a strategic approach that provides the necessary liquidity to stabilize markets, ensuring smoother trades and reducing volatility. By creating buy and sell orders around the current market price, market makers help maintain a healthy trading ecosystem. This article examines the fundamentals of market making, its benefits for traders and exchanges and the way it enhances the overall efficiency of the cryptocurrency market.

A crypto market maker is an entity or individual who primarily provides liquidity in cryptocurrency markets by continuously placing buy and sell orders for digital assets. This activity ensures efficient trading and helps maintain stable prices.

Crypto market makers play a key role in keeping markets liquid by continuously placing buy and sell orders on exchanges. Here's a closer look at how they operate.

Key Characteristics of a Crypto Market Maker

Crypto market makers provide liquidity and stabilize prices in the cryptocurrency market. The following are the key traits that enable them to operate effectively.

Market makers continually place buy and sell orders, ensuring the availability of transactions for traders. This constant availability reduces wait times for trades and minimizes the price impact of large orders, making the market more efficient and accessible for everyone.

One of the fundamental roles of market makers is that of managing the bid-ask spread. By consistently quoting competitive prices, they narrow this spread, thereby enhancing trading efficiency and reducing costs for other market participants. This spread is also their primary source of profit.

Market makers leverage advanced algorithms and HFT strategies to analyze market conditions and optimize their order placements. This technology allows them to react swiftly to price changes and maintain a balanced inventory of assets, which helps to manage risk and maximize profitability.

Due to the inherent volatility of cryptocurrency markets, effective risk management is vital for market makers. They employ various techniques, such as hedging and real-time market analysis, to minimize exposure to sudden price swings. This ensures their operations remain stable even in the face of market fluctuations.

By providing continuous liquidity and facilitating smooth trading operations, market makers enhance overall market efficiency. Their presence attracts more traders, which increases transaction volumes, boosts exchange activity and contributes to a healthier trading environment.

Given the quickly evolving nature of the cryptocurrency landscape, market makers must be adaptable, continually refining their strategies in response to new technologies, regulatory changes and shifts in market dynamics. This ensures they remain competitive and relevant.

Crypto market makers play a critical role in the cryptocurrency ecosystem by providing liquidity and stabilizing prices. Despite the integral role they play, however, their operations come with both advantages and disadvantages. 

Additional Importance of a Crypto Market Maker

Crypto market makers play a vital role in maintaining the efficiency and stability of the cryptocurrency market. Their presence on crypto exchanges ensures trading environments operate smoothly. 

Newer and smaller cryptocurrencies often struggle with liquidity. Market makers provide a market for these assets, promoting their growth and creating a more diverse and dynamic crypto ecosystem.

Through continual quoting of prices, market makers aid in fair price discovery, ensuring that cryptocurrency prices reflect actual market demand rather than extreme fluctuations. This promotes a more trustworthy and transparent trading environment that allows traders to make data-backed decisions. 

Crypto market makers are essential players in the cryptocurrency ecosystem, providing liquidity, stabilizing prices and ensuring smooth trade execution. Their use of advanced algorithms and real-time order placements encourages a more efficient, accessible and fair market. However, risks such as market manipulation, potential capital loss and lack of regulation can be problematic. Overall, the role of market makers in supporting emerging assets and maintaining market stability makes them indispensable for a healthy and growing crypto environment.

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Crypto Market Maker: Boosting Trades With Strategic Liquidity

SEC Chair Gary Gensler announced he will resign on January 20, 2025, coinciding with President-elect Donald Trump's inauguration.

The S&P 500 rose 0.53% as investors shifted toward cyclical stocks expected to benefit from a strengthening economy, while technology shares lagged. Coindesk Indices, an index measuring broader cryptocurrency market performance was up by 4.79%, with Bitcoin and Ether rising by  4.19% and 8.75%, respectively in the past 24 hours.

Today's top performer is XRP, which surged 24.3% following the partnership between Ripple and MCSocialVenture to boost financial resilience and access in emerging markets.

Ripple (XRP), launched in August 2012, is a blockchain technology company focused on improving international payments with its cryptocurrency, XRP. 

, focused on investing in emerging market entrepreneurs. The initiative will pilot financial resilience and humanitarian solutions built on the XRPL, aiming to advance equitable access to finance.

Check Out the Latest Prices, Charts, and Data of 

 he will resign on January 20, 2025, coinciding with President-elect Donald Trump's inauguration. Gensler, whose term runs until 2026, faced pressure from the crypto lobby due to the SEC’s strict regulatory actions against the industry, including high-profile cases against Coinbase and Binance. Gensler’s departure is seen as a victory for crypto advocates, who hope the next SEC chair will be more crypto-friendly. Trump has hinted at firing Gensler on his first day in office and is expected to appoint a chair with expertise in crypto, such as Mark Uyeda, Hester Peirce, or Chris Giancarlo.

Yesterday, BTC Spot ETF data revealed a net inflow of $396.7 million, driven by $404.5 million from non-GBTC sources, partially offset by a $7.8 million outflow from GBTC..

 for those who participated. To claim, visit 

 using code B0FKOP. Additionally, Morph Zoo Season 2 has launched on mainnet, allowing users to earn points by bridging ETH or executing transactions on Morph. The Bitget Wallet offers a 1.2x multiplier on points to maximize rewards.

Beginner

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SEC Chair Gary Gensler to Resign on Inauguration Day, Marking a Win for Crypto Lobby

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Blockchain

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Yield farming in DeFi is getting more popular, but it can be confusing. We dissect everything you need to know here.

yield farming featured image

In less than ten years, we’ve seen the novel crypto space reshape everything we know. Now, we're all on the verge of perceiving the rise of decentralized finance (or simply 

) becoming mainstream with its applications in the crypto world. With the surge of $4 billion total value locked (TVL) in DeFi, this ecosystem’s development is entirely viable. Of course, crypto is volatile, but DeFi unlocks opportunities for the public. 

The upshot? More DeFi projects are introduced to sustain and transform conventional financial products run on transparent protocols without intermediaries. That’s precisely how decentralized exchanges, insurance, lending and borrowing have given rise to the newer phenomenon of yield farming.

If you find yourself struggling to understand the fundamentals of yield farming, or to assimilate the relationship between DeFi and yield farming, here’s what you need to know. Read on to decipher what yield farming is all about, including its mechanism, applications, profitability and the underlying risks.

Yield farming is a practice allowing yield farmers to earn rewards by staking ERC-20 tokens and stablecoins in exchange for supporting the DeFi ecosystem. Yield farming, also commonly known as liquidity mining, involves depositing and lending a crypto underlying a mining mechanism to support the liquidity pool for lucrative rewards.

While yield farming is comparably similar to the concept of staking, there is substantially more underlying complexity associated with this mechanism built on the Ethereum blockchain. As opposed to staking, yield farmers usually move their digital assets from one lending market to another in search of the highest yields. 

Typically, a yield farmer is required to lock their funds into a lending protocol such as Compound or MakerDAO to provide liquidity to funding pools, in which borrowers and lenders earn an incentive in the process. For example, when a yield farmer stakes 1,000 USDT in Compound, the farmer will receive a cUSDT token in return for each USDT token. These tokens can then be pumped into an automated market maker (AMM) liquidity pool that accepts cUSDT to leech off the transaction fees. In short, a yield farmer is earning incentives on Compound and the liquidity pool.

The emergence of the DeFi protocols Compound (COMP) and Aave is what gave rise to yield farming’s boom in the early summer of 2020. Soon after the COMP governance token issuance took off, the succeeding AMM participants in yield farming (such as Balancer, Kyber Network, Tendies and SushiSwap) further strengthened its growth and position. It was thereby making yield farming one of the most popular trends in DeFi. While it’s possible to farm using cryptocurrencies such as ETH and stablecoins like DAI, USDT is still a more acceptable token across AMM platforms. 

Of course, there are plenty of factors that contribute to the popularity of yield farming. But the main reason for yield farming popularity is that it offers a unique opportunity to earn yield on a loan. Regardless of your status, a yield farmer can find loopholes to stack yields, simultaneously earning multiple governance tokens. 

Yield farming is never a standalone mechanism. It usually involves extensive participation of automated market makers (AMM) — the liquidity providers (LP) that add funds to the liquidity pool from time to time to uphold the ecosystem. Following the staking concept, the LP earns rewards by facilitating the transactions on a blockchain network.

Hence, liquidity providers and liquidity pools play an indispensable role in maintaining the liquidation rate. After all, liquidity tends to attract more liquidity. 

The AMM concept is direct yet intricate at the same time. Liquidity providers who provide funds into the liquidity pool enable yield farmers to lend, borrow and exchange tokens. Every transaction will incur a fee, and these fees are paid out to liquidity providers in exchange for the service. Besides the yields, new tokens will be paid out according to the unique implementation of the protocol to encourage LPs to keep funding the liquidity pool. 

It should be clear that DeFi is based on Ethereum, although stablecoins are frequently deposited as well. Stablecoins are pegged to USD. Hence, you’ll often see coins like DAI, USDT, USDC and more in the DeFi ecosystem. However, according to the individual protocol, if you’re depositing USDT into Compound instead of getting USDT, you’ll receive cUSDT. While there are no restrictions on how you circulate the coins for maximum yields, you’re obligated to follow the protocols. That means your cUSDT is continually changing, depending on the tokens that are pegged to the protocols. 

However, yield farming is still in its initial stages, so comprehending the operations for maximum yield can be complext. On top of that, yield farmers rarely disclose their strategies to the public, making it even harder for beginning investors to understand. 

Crypto mining is based on a consensus algorithm called proof of work (PoW), while yield farming relies on the decentralized ecosystem of “money legos” built on Ethereum. Compared to crypto mining, yield farming is an innovative way to earn rewards with cryptocurrency holdings using permissionless liquidity protocols.

While both yield farming and crypto mining involve mining pools, liquidity providers are the prominent elements which differentiate yield farming from crypto mining. 

Beyond the shared, decentralized peer-to-peer network, what further differentiates yield farming is its resemblance to the borrowing and lending plan involving governance tokens to yield rewards. Furthermore, crypto mining aids the introduction of new coins into the existing supply by mining a block to hash each transaction taken from the memory pool individually.

Ultimately, yield farmers and crypto miners share the same goal of earning incentives by deploying unique strategies to maximize yields.

Simply stated, liquidity mining means giving liquidity to accrue tokens, while obtaining governance rights represented by the token. The curious amalgam of liquidity and mining gives rise to liquidity mining, favoring DeFi's prospects. While the dissection of liquidity involves the supply of coins or tokens, mining takes account of the PoW computation power to receive new tokens minted by the algorithm. For example, an avid investor can supply liquidity by staking in a liquidity pool like Uniswap to earn a dividend of 0.3% swap alongside newly minted tokens upon each block’s completion.

Yield farming, however, is a liquidity movement across DeFi platforms that utilizes different mechanisms, including fund leveraging and liquidity mining, to maximize returns. At the same time, yield farmers maximize their gains by moving funds from time to time with different strategies. These could range from yield farming roots to increasing liquidity for Synthetic ETH tokens (Synthetix) or using the 100% APR approach to supercharge earnings by leveraging loans to borrow tokens that yield Compound. 

Ultimately, both liquidity mining and yield farming differ, even though they're used interchangeably since they both maximize returns through earning governance tokens. 

Yield farming allows token holders to generate passive income by locking their funds into a lending pool in return for interest. While staking involves a validator who locks up their coins, these can be randomly selected by the PoS protocol at specific intervals to create a block. 

Staking usually involves a larger amount of crypto to boost the LP's chances of being selected as the next block validator. Depending on the coin maturation, it can take up to a couple of days before staking rewards materialize. 

In contrast, yield farmers move digital assets more actively to earn new governance tokens or smaller transaction fees. Unlike stakers, yield farmers can deposit multiple coins into liquidity pools across several protocols. For example, yield farmers can deposit ETH to Compound to mint cETH, then deposit that into another protocol that mints third and fourth tokens.

Compared to staking, yield farming is more complex, and the chains can be hard to follow. Though yield farming has a higher return rate, it's also risker.

Anyone who invests expects a return, and yield farming is no exception. As we discussed earlier, yield farmers earn rewards by lending in the liquidity pool, but this also sparks a discussion about whether or not yield farming is profitable. 

Generally, yield farming’s returns are calculated annually. That means you can expect an average return over the span of a year. However, the profitability of yield farming is rather complicated, as it depends on the capital you deploy, the strategies you use, and of course, the liquidation risk of your collateral. 

On the bright side, since yield farming is still in its early stages, those who decide to stake their cryptocurrencies into protocols can expect significant returns. While the profitability is uncertain, some successful yield farming techniques are circulating in the crypto world with 

. With the continuous growth of active users in DeFi, the ROI for tokens with governance rights could be a massive hit in the years ahead. 

It's hard to estimate the returns of yield farming, even for a short term period. Many factors contribute, including volatility in yield farming and relentless competition. Let’s use the demand and supply concept to justify the idea: If one yield farming strategy becomes overpopulated, then returns will naturally dwindle.  

Nevertheless, calculating the ROI of yield farming is still possible despite its limitations. Here’s an overview of the standard metrics.

APR doesn't consider compounding, which means the calculation only involves the multiplication of the periodic interest rate by the number of periods within a year. The yearly return rate is imposed on borrowers but is paid to capital investors. 

 involves the return rate imposed on capital borrowers and then paid to capital providers rather than investors. Compounding interest, however, is taken into account to increase investors' returns.

Basically, the main difference between these two metrics is that APR doesn't consider compounding, while APY describes the return rate with compounded interest.

Every investment possesses some threats, and yield farming is no different. Yield farming is indeed profitable early on, but continued profit requires extensive strategic planning. In most cases, the most profitable yield farming strategy involves a highly complex process. It also requires considerable capital to deploy different investment tactics.

In fact, if you’re unaware of the risks it comes with, you’re likely to encounter the following threats:

Increased chance that collateral will be liquidated

In order to take a loan, you’ll need to collateralize some assets. Depending on the protocol, some borrowers are required to over-collateralize, mainly to allow some room for position adjustments in the market whenever there’s a sudden market crash. While some lenders require little to no collateral, this is precisely why it’s essential to take the collateral ratio into account to avoid liquidation. 

For example, you can only borrow an asset if you deposit according to the collateral ratio of 400%. Therefore, when your collateral value is $1,000, you can only borrow $250. The higher the collateral ratio, the less you can borrow. It’s best to avoid liquidation by adding more collateral from the actual asset you intend to borrow.

Loss of assets due to smart contract glitches

Yield farming relies on smart contracts to bind two anonymous parties’ farming transactions without an intermediary. This means that when there’s manipulation, or error in the central data, participants can fall victim to system failure such as leaks of financial information and the loss of funds. 

The farmed token might grow considerably in value, but its value could plummet as well. While DeFi is hyped because of public interest, its future is uncertain. Ultimately, value drops whenever the trend dies down or there's an oversupply of tokens in the market.

Lack of assurance, since DeFi is a highly composable system

DeFi is based on the idea of composability: Each building block comprises components which can be combined differently according to user requirements. This concept is essential in eliminating third-party involvement, thereby making the protocols seamless and permissionless. The downside is that when a block experiences a malfunction, the entire ecosystem shares in the losses as well. 

It can't be said that yield farming is entirely safe. Like everything else, investment takes time, effort and extensive research. As with any other endeavor, there's danger ahead for those who fail to appreciate the ideology behind it.

However, all this can be prevented by simply reading and understanding the terms of a smart contract. Try to be less reliant on outsourcing third parties to interpret the contract, and instead know the contract’s ins and outs so that you can detect any potential scam. However, do note that smart contracts are vulnerable to system bugs. This means that if the system fails, you risk losing staked funds or values of a token in the protocol.

While some crypto enthusiasts believe DeFi and/or yield farming possess boundless growth, volatility is still a part of it all, giving rise to speculation of another crypto bubble. Ultimately, when investing, you should weigh your financial position and your capability to go out of your comfort zone in order to reach logical decisions.

It’s clear by now that farmers earn incentives by providing liquidity to a platform. Interest and fees vary, depending on the capital growth and the strategies you deploy. The inevitable question is: Which protocols can help you diversify your yield?

), Uniswap uses an AMM to swap two trustless cryptocurrencies into a fund pool. In exchange, the liquidity provider earns a 0.3% fee when liquidity is provided for each swap. 

The Compound token (COMP) is granted to users who borrow and lend crypto assets with it. This approach is one of the simplest and most popular strategies. Anyone with an ETH wallet can supply assets to the COMP liquidity pool. The challenge here is to determine the token's expected value, while allocating sufficient liquidity to maximize returns. 

The great thing about yield farming is that you can stake yields to generate more profits. Let’s say an LP receives a token minted by an algorithm: Re-staking it based on the other protocols will yield a third token.

Here’s are some of the platforms that support these protocols.

According to the algorithmic interest rates, lenders who deposit funds will receive aTokens and immediately earn compounding interest.

Balancer adopts similar protocols like Uniswap to allow LPs to allocate funds to the pool. However, LP can disregard the fixed fund allocation on Uniswap by allocating custom funds. 

As stablecoins optimize swaps, Curve functions like Uniswap, except that it allows users to make higher-value swaps with lower slippage rates. For example, a Curve token can be staked on Synthetix to yield sETH with the underlying minted token, then redistributed to another staker. 

Since yield farming is built upon Ethereum, the computation effort needed to execute a transaction or smart contract execution is inevitable. And to do so, you need Ethereum Gas.  Ultimately, the more complicated a protocol is, the more gas is required to execute a transaction.

In short, gas is used to calculate the fees to pay within the network to perform a transaction. Let’s say you intend to interact with Synthetix; you’ll need more gas to transfer any of the SNX because the protocol is more intricate than others.

The debt pool represents the total value of the tokens you've funded in the platform. Taking Synthetix as an example again, when you stake by minting sUSD, you’ve already claimed a portion of the debt. 

So, if a majority of SNX holders hold sETH while ETH soars, then the debt pool will increase proportionally. That means you'll need more funds to unlock the SNX again. Let’s say you minted 1,000 sUSD, and the total circulation of Synths is at $1 million; your debt ratio is standing at 0.1%. You’ll need 1,000 sUSD to 

, while the unlock rate doubles as the prices of Synths doubles as well.

Calculating your short-term profit with APY can be misleading — and confusing. Since yields are usually based on the expected return for a year, the APY percentages in the short term aren't sustainable. Looking at a farming reward that only lasts a few days with a volatile rewarding system, APR’s actual calculation is doubtful.

What Does the Future Hold for Yield Farming? 

Since they first rolled out, DeFI and Yield Farming have shaken up the internet. With over a million active users in this ecosystem, it’s impossible to see what the future holds. Will there be newer, more value-adding and cutting-edge applications to revolutionize yield farming and DeFi in general? Only the future can tell. 

What Is Yield Farming in DeFi and How Does It Work?

Grab Up to 5,000 USDT in Rewards

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