PrivacySwap Yield Farming, the perfect way to maximize your assets

5 min readJul 30, 2021

Based on Google Trends, the term DeFi, or Decentralized Finance, has achieved a new high at a peak score of 100 at the time of writing, more than doubling the previous high point in September 2020. With that being said, people significantly show interest in such offerings, with some even deciding to dive into investing.

We know that some of you are also interested in investing. However, you are unsure about how and where to start. So, today, we at PrivacySwap will teach you one of the best ways to maximize your cryptos, and that is through yield farming. Let’s discuss!

Yield farming at PrivacySwap

Well, not everyone can understand the concept of yield farming overnight since every platform offers different benefits and rewards. So, we thought it is excellent to tell you how to yield-farm at PrivacySwap.

First off, let us explain yield farming. Farming is earning new crypto assets by lending or staking your existing crypto assets. We know that when you put your money in the bank, it will generate interest. In Defi space, when you stake your cryptocurrency holdings, you may also be rewarded with interest or fees. Again, this varies with each DeFi project.

Further, It’s called yield farming when a system rewards you with large sums of freshly created coins. Hodling these new tokens is advantageous as the value of these coins can skyrocket, making early investors affluent.

For example, someone asks you to deposit euros and dollars in exchange for thousands of little coins every few minutes. Your original euros and dollars are protected in a smart contract and may be withdrawn at any moment. These smart contracts or vaults will also safeguard your tokens so you can be assured that the platform is not just profitable but also secured. At PrivacySwap, we call our vaults the “PrivacyVaults.”

What is PrivacyVaults?

PrivacyVaults is a yield optimization system that makes use of the concept of auto-compounding. The assets will be promptly staked into a ‘vault,’ with smart contracts protecting them. The investment strategy linked with the vault will automatically increase the quantity of tokens you have invested by compounding varied yield farm reward tokens into your original invested asset.

Despite what the term “Vaults” implies, your assets are never stored in an actual vault on PrivacySwap. Therefore, users can take money out at any time. Furthermore, PrivacyVaults have the potential to boost your assets considerably.

By using PrivacySwap in yield farming, users will no longer need to manually compound their assets as our yield optimizer will automatically do that for you. In addition, the harvest feature will still be available, and using such a function will generate another income.

Are there any types of yield farming?

Yes. Yield farming consists of two types, liquidity mining and token farming. Explanations to which are as follows.

Liquidity Mining

A key aspect of liquidity mining is that individuals may utilize their cryptocurrency assets to supply liquidity to Decentralized Exchanges, which means they can easily exchange tokens for one other.

Note that users need to buy BNB first then trade it to PRV on centralized exchanges like Binance before starting staking into the project.

Token Farming

While some platforms incentivize liquidity providers with fees, others add a fresh twist to the mix by giving out platform tokens as well.

After supplying liquidity to the pools, users can receive native tokens from the platforms. When the pool is smaller in size, the payout rate is higher, attracting more and more “farmers.”

To distribute prizes, some platforms use liquidity pools from other platforms. To begin farming the protocol’s tokens, users must first add a set of tokens to pools and then stake the tokens on the platform.

How do you calculate the yield farming returns?

Farming results are usually annualized when calculating the projected yield. This calculates the potential returns for a year.

Annual Percentage Rate (APR) and Annual Percentage Yield (APY) are two often used measures (APY). The difference between them is that APR does not take compounding into account, but APY does. In this example, compounding refers to the act of reinvesting gains to generate higher returns.

However, keep in mind that the terms annual percentage rate (APR) and annual percentage yield (APY) are often used interchangeably. It’s also important to remember that these are just estimates and projections. Even short-term gains are difficult to predict precisely. Why? Yield farming is a highly competitive and fast-paced business with quickly fluctuating rewards.

We also created an article that has a more technical explanation on how to calculate APY. You can read that here.

Despite all the advantages and possible earnings users could get while yield farming, there could always be drawbacks. The most significant is the Blockchain’s network congestion. Users must pay exorbitant fees to conduct yield farming trades. The fees necessary to get your transaction confirmed rise dramatically as the number of pending transactions rises.

However, platforms such as our PrivacySwap never stop developing and remodeling our platform to provide you with convenient yet cheaper transactions. We also envision educating people, enlightening everyone on cryptos’ fundamentals, and making everybody literate about the crypto know-hows. By that, we offer free DeFi classes to fulfill such visions and goals.

Conclusion

In a nutshell, we still advise studying the platform you will be engaging with before you dive into it. Understandably, there could be testimonials wandering all over the internet, but that does not guarantee that everyone will receive the same result. At the end of the day, DeFi can be both exciting and adventurous as it has the potential to help establish a more open and accessible financial system for everybody. Nevertheless, it is always recommended to engage in a platform that does not only offer you a good income but knowledge too, like us, PrivacySwap!

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