Okay, guys. Today, I'll be talking to you
about something a little bit different that has been a topic of discussion for several weeks. I'm talking about farming, and, no, I'm not talking about that FarmVille game
you used to play on Facebook, you boomer. No, today, we're talking about how you can
make mad gains with your crypto and have it work for you by Yield Farming. I'll tell you how you can make bank passively
just by having crypto. Let's get it. TimeMiner utilizes a new system called Proof-of-Time,
a combination of Proof-of-Work and Proof-of-Stake. The contract code creates one new coin every hour
and distributes it to the existing holders according to their current percentage of the
circulating supply. Every day, there will only be 24 coins added
to the circulating supply. Check out TimeMiner. Welcome to BitBoy Crypto!
The hardest working channel in all of cryptocurrency. If you're new, hit that Subscribe button and join both
my free Telegram groups and my new Discord server, the BitBoy Lab, to learn more about crypto
or connect with me and the BitSquad.
Also, I'm giving away a CATX Node worth almost 25K, a
whole Bitcoin, 2 Ethereum, and 2 Litecoin at the end of September. To take part in the giveaway,
please visit 1btc.BitBoy.Live for details. Only subscribers are eligible. Alright, guys. We're going to be touching on the new fad
in the crypto world in how you can make massive gains just by having your coins in the system. Yield Farming is the act of holding funds
in smart contracts that can provide high returns and high percentage yields on what's invested. These annual percentage yield or APY values
have been staggering to say the least. And let's face it, crypto gains are the only way
that you can expect to make gains of any type. When was the last time you've gotten to the gym
to make some gains. You guys never even heard of that before? Gym? What's a gym? Yield Farming is closely related to
Automated Market Makers or AMMs in the DeFi world, which is where they were popularized. AMMs are a type of decentralized exchange
that you probably already used or know about as it includes Uniswap, Balancer, Curve, and Kyber.
They use algorithms to set the price of a token,
and traders can buy and sell them as they see fit. The difference is that a trader does not need
to find someone to sell to, but they sell to a liquidity pool that acts as the intermediary. That liquidity pool has two assets as a trading pair
and the ratio between these two will determine the value of the asset. The problem arises if there are not enough assets in the pool. This is where the search for liquidity comes in. Exchanges want as much liquidity as they can
in their pools. I mean, how else are they going to swim
when the pool is empty, right? Oh, excuse me. I am a dad, you know. Bad jokes are part of the job, so screw you. I’m embracing it. The main reason for this need for liquidity is for them
to be able to guarantee the transactions taking place but also to guarantee stability and lower variance
in prices due to one simple transaction.
Imagine you're holding token A and want to buy token B
which is initially of the same value, so we have similar amounts of A and B. If you have a small pool of tokens, that transaction will have a massive impact
on the value of these. If you have many more in the pool
and there is enough liquidity, the single transaction will be insignificant to the total value. This is like with Doctor Who,
for all you Brits out there who are nerds. Wait. Aren't Brits and nerds the same thing? Or people who pass too much time on the internet
watching memes. A transaction amount depends on the context. Are 4 tokens a lot? Yes, if you don't have any liquidity. If you do, it's not.
This is why exchanges want liquidity in what hodlers
keep in their crypto in smart contract as yield farmers will move their assets to whichever
protocol will provide the largest returns for them being there. Just like your gold digger girlfriend looking
for her next sugar daddy. Oh, hell no. Just kidding. We all know, you don't have a girlfriend. To get the farmers to stay, the platforms reward hodling by charging a fee
on all transactions on the pool, that are then added to the same.
This rewards the people that have their assets in the pool and own a percentage of it by increasing the pool. Some platforms, such as Compound,
even reward their liquidity providers by giving them their COMP governance token for hodling. This is where the term liquidity mining comes in. Liquidity mining allows users to deposit
and freeze their assets in the liquidity pool but are provided a fraction of a new token being traded in addition to the returns they would receive for providing liquidity. Liquidity mining was a thing before
but really took off like a rocket ship with Compound and their COMP token which is given to users for both borrowing and lending.
This basically makes interest on borrowing cheaper
and lending becomes even more of an incentive. Liquidity trading can be taken up to 100% on these platforms. In these, a trader can use that collateral
they initially invest to borrow, which can in turn be staked and again used as collateral
while getting COMP tokens in all these steps. COMP is like Xzibit. They heard you like gains,
so they put gains in your gains. I know I don't look like it, guys,
but my meme game is strong, yo. And also, Xzibit, will you please pimp my Bitcoin ride? Anyways, back to the farming. Yield farmers take advantage of this
and bring it to a new level. Given that every pool gives a different return, they look to jump from pool to pool chasing
the largest return for their investment or the largest yield possible, taking advantage of arbitrage opportunities
created by different pools and platforms, changing what's being staked on depending entirely
on which one provides the highest APY.
Not only that, but those pansies that feel like
that risking their precious crypto’s too much for them, they can also use stable coins
to take advantage of the hot new thing. You guys need to learn how to gamble a little bit. The most used platforms for yield farming are Compound Finance, which as mentioned previously, allows users to gain the platform's COMP token
when they borrow or lend. Others include MakerDAO, Uniswap, Synthetix, Curve, and Balancer. Just as being a farmer in real life,
being a yield farmer is not without risk and should only be left to the big boys
who have the big bucks and know what they're doing. By working using a collateralized loan, there's the possibility of liquidation that can take place, and the collateral can no longer cover the loan. Liquidation can happen if either the value
of the collateral drops or if the value of the loan increases. In platforms that let you borrow on collateral, this can be a problem if you're stupid enough not to have
the funds and borrow over what you're able to handle.
By jumping from one pool to another,
the farmer is dependent on the interest rates offered, and significant cash can be lost due to this. Being a yield farmer means you have to always be active
and you will have to be trading at all times and may have to move to trading bots to help with that. I guess you could call it their crop rotation. Yield farming requires the trader have their assets
stocked in smart contracts for a long time, risking the total loss of invested capital
should those be attacked, which has definitely happened in the past. Like back in April,
when a hacker stole $25 Million from dForce. That being said, we can see that this has taken off and investors are flocking to make use of this opportunity. How can we track this trend? For this, we can use the total amount of assets
that are in smart contracts as a marker.
Looking at DeFi Pulse, we can see that the total value
locked in different pools is at 9.22 Billion. That is a growth of 85% in just under a month. This train or John Deere tractor is leaving the station,
and if you're not on it, you'll be asking yourself
why you didn't get off your butt and run. And nothing runs like a deer. But now is your turn. What do you guys think about Yield Farming? Does it make you nervous? Do you want me to dive in a bit deeper within
to show you guys how it works? Let me know what you think
in the comment section down below. Also, don't forget to visit 1btc.BitBoy.Live
to enter our full Bitcoin giveaway and a CATX Node. It might just change your life. I hope you enjoyed this video. If you did, please make sure to smash the Like button
and hit Subscribe to become a member of the BitSquad. Thank you so much for watching. Have a blessed day. BitBoy out..