How will Yield Farming work on SundaeSwap? | SundaeSwap Help Center (2024)

FAQs

How will Yield Farming work on SundaeSwap? | SundaeSwap Help Center? ›

Yield farming on SundaeSwap will give Liquidity Providers (LPs) a way to earn SUNDAE in correspondence with the amount (and or value) of LP tokens staked. A total of 500,000 SUNDAE will be distributed on a daily basis over the first six months of the DEX's operation to yield farmers that meet specific conditions.

Key Takeaways. Yield farming is a high-risk, volatile investment strategy where an investor stakes, or lends, crypto assets on a decentralized finance (DeFi) platform to earn a higher return. An investor receives payment of the return in additional cryptocurrency.

The SundaeSwap protocol allows users to create liquidity pools, and by doing so earn trading fees as a form of yield or reward for providing the liquidity.

Is Yield Farming Worth It? While yield farming can be a lucrative way to earn yields in the crypto market, it is also one of the riskiest activities you can engage in. Even if you are yield farming on reputable DeFi protocols, smart contract risk, and hacks could still lead to a complete loss of funds.

Yield farming platforms may offer high returns but the required initial investment is usually also higher than staking platforms. This is what makes yield farming ideal for investors who have the necessary liquidity and risk tolerance to invest in these protocols.

Yield farming has garnered attention due to its high Annual Percentage Yields (APYs). While these returns are attractive, they come with significant risks. Impermanent loss, smart contract vulnerabilities, and market fluctuations can lead to substantial losses.

Yield farming is a way of earning rewards by depositing cryptocurrency with decentralized finance services. Think of it as the extreme couponing or credit card churning of the crypto world: Practitioners weave complex connections throughout the blockchain economy to wring out the highest possible returns.

According to SundaeSwap price prediction 2025, our prediction suggests that SundaeSwap price will fluctuate within a range of $0.01885 (minimum) to $0.1168 (maximum). Additionally, based on technical analysis and price movements, the average trading price of SUNDAE is expected to be around $0.01803 in 2025.

The SundaeSwap protocol allows users to deposit liquidity into existing liquidity pools, and by doing so earn trading fees as a form of yield or reward for providing the liquidity.

SundaeSwap Price Live Data

The live SundaeSwap price today is $0.009133 USD with a 24-hour trading volume of $11,964.07 USD.

Is yield farming riskier than staking? ›

While yielding farming presents opportunities for much higher rewards, it also involves taking on greater downside risks relative to staking. By constantly shifting funds across new DeFi protocols to maximize yields, exposure increases to technical vulnerabilities that can lead to loss of assets.

Common types of yield farming

Liquidity providing: Liquidity providers, or LPs for short, contribute cryptoassets to a decentralized exchange (DEX) and receive a percentage of exchange fees from trades. LPs must deposit equal amounts of two cryptoassets into a trade pair, for example VERSE-WETH.

Yield farmers have the ability to stake their tokens in liquidity pools, which are placed in various DeFi protocols. By doing so, they not only provide liquidity but also earn rewards for their staked tokens depending on the type of protocol they are providing liquidity for.

Do you pay taxes on yield farming? Yes. You'll incur capital gains and/or income tax depending on the specific mechanisms of the DeFi protocol you're using.