Yield farming is a method used by investors to earn rewards on their cryptocurrency holdings. Essentially, it involves lending or staking your crypto in various decentralized finance (DeFi) platforms to generate higher returns.Investors provide liquidity to these platforms, which is then used for various financial activities like trading or lending. In return for providing this liquidity, yield farmers receive tokens or interest payments, often paid in the platform’s native currency.The returns can be quite enticing, sometimes exceeding traditional investment options. However, yield farming comes with risks. The value of the tokens can fluctuate, and there’s also the potential for impermanent loss, where the value of staked tokens decreases compared to holding them directly. Additionally, smart contract vulnerabilities can expose funds to hacks.Despite these risks, yield farming has gained popularity as it allows users to maximize their returns on idle assets. Successful yield farmers often switch between different platforms and strategies to optimize their earnings.