Top 3 Yield Farming Platforms for 2022

Yield farming platforms are among the hottest projects in DeFi as of today. Promising risk-free passive income is one of the main reasons behind the explosive growth of DeFi.

Although it may not be an immediate escape from living paycheck to paycheck, yield farming can certainly bridge this distance. So the question is: how do these platforms work? And which of them offer the best APYs?

Let’s find out.

1. YOP Finance

YOP Finance is a VC-backed yield optimization platform that offers some of the highest APYs on this list. Investors can earn up to 65% APY on Bitcoin, Ethereum, and stablecoin deposits. How is YOP Finance (which stands for Yield Optimization Protocol) able to offer such returns?

• YOP Finance’s smart contracts manage risk and repetitively reinvest (auto compound) their returns while moving money from one protocol to another in search of the highest APYs.
• Rewards are generated from YOP Finance’s treasury. Furthermore, YOP Finance is VC-backed which means they will have a run rate in case of a prolonged bear market.
• Investors can increase their returns by using the boost mechanism which involves buying and staking YOP Finance’s utility token ($YOP) for a period of time. The boost is in the form of a multiplier x1 — x10, which applies to the Reward APY, which is above the base APY of the vault.

What also makes YOP Finance stand out from other yield aggregators is its intuitive UI, which is designed specifically for new crypto enthusiasts who originate from the traditional finance world.

Another difference-maker is that YOP Finance’s team is fully de-anonymized as its members can be easily looked up on the website.

Since transparency goes a long way, YOP Finance has made the data behind the APY calculation available and easy to find on its documentation page.

Plus, the team has a proven track record since they are a part of Pluto Digital — a UK-based web3 technology company.

Users just need to follow a three-click process to start earning rewards passively on their crypto deposits.

Even though yield farming platforms can provide high returns, it would be all for naught if users found the platform difficult to use. DeFi does not allow much room for error as gas fees can be high and annoying.

Most DeFi platforms today are filled with complicated jargon that can scare away the average crypto investor thanks to all the overwhelming information. It is of utmost importance that users require little time to understand the earnings they can generate.

However, YOP Finance Finance avoids such a mistake by building its UI and ensuring it provides lots of hand-holding to ensure users find it intuitive.

YOP Finance avoids messy interfaces by detailing the more essential info at first glance with an option to quickly navigate to YOP Finance’s docs page for more vivid explanations.

2. Yearn

Yearn is one of the oldest and largest yield farming platforms in the crypto space. As a protocol managing close to $1 billion in crypto assets, Yearn has garnered a strong reputation amongst DeFi investors thanks to its longevity and sustainability. Furthermore, Yearn uses smart contracts to automatically leverage deposits and find strategies with the highest returns by constantly moving your money from one place to another.

Passive income enthusiasts can earn interest on a wide variety of Curve tokens, as well as traditional crypto assets.

As of right now, Yearn is offering APYs up to 25% for Curve tokens, whereas mainstream tokens such as BTC, ETH, and stable coins like USDT and DAI are earning up to 0.5% APY.

3. Beefy — MultiChain Yield Optimizer

Beefy stays true to its tagline as it offers vaults across 15 blockchain networks, including Avalanche, Polygon, Arbitrum, Fantom, and more. The platform leverages top liquidity pools, automated market maker applications, seigniorage tokens, and lending platforms available on each of its supported blockchain networks.

While a liquidity pool may offer a nice APR, it will not automatically compound whatever interest it generates. That’s why Beefy’s AutoCompounder compounds its returns every few minutes so that returns can be further maximized.

On Beefy’s Avalanche vaults, users can currently earn about 7% APY on AVAX (Avalanche) deposits and about 4% APY on USDT deposits.

Conclusion

Sometimes it may be a wise decision to put your crypto assets to work instead of letting them lay dormant inside a cold wallet.

Yield farming platforms, such as YOP Finance Finance, can generate steady passive income while saving their users from troublesome gas fees.

Before diving in, it is absolutely necessary to learn everything about the platform you choose.

Transparency plays a large role in the validity of your research as you may not find answers to all your questions.

The truth is most of these platforms work in a ‘set-and-forget’ type of fashion. Nonetheless, investors should still keep a close eye on their deposits and regularly take profits when necessary.