Yield Firming

 

 

What yield firming has already been tried. As usual, Research Purpose Only. I will say a summary.

Crypto has decentralized exchanges like Uniswap and PancakeSwap. The way they work is cool. Unlike centralized exchanges like Binance and Coinbase.

For example, if you want to exchange yen and dollars, you can go to the exchange counter Exchange. That is Centralized Exchange. Decentralized Exchange is like a large glass donation box. I put dollars and yen in it. No one intervened. I have a dollar, If you want to buy yen, you have to put your dollar in the box and take out yen of the same value.

When I say that it is a big glass box, I want to give an example of how I can't take more without people knowing that I can see everything. In the digital system, it is not possible to take more because it is coded with a Smart Contract.

The problem here is, You need to put dollars and yen in the box in advance so that the person who wants to come can come. Who will add? Here's how to solve this problem.

- If you add yen or dollars to the box, you need a Liquidity Provider (LP) Token.

- Those who ask for money can't get it for free. As much as one or two kyats of begging must be returned to the begging box.

- Let's say that one day in a week, the exchange box is opened and those who have LP Token are distributed proportionally.

This is called Automated Market Maker (AMM).

So, if you put dollars and yen into the box in advance, the person who put it in will get a fee once a week. This method is called yield firming. Put your own money in the bucket and plant, When you get money, it's like reaping. Stupid is pretty stupid.

In the crypto world, there are as many innovations as there are gingers.

Yield firming itself is a good innovation, but it also has a lot of risk. Impermanent Loss, due to changes in the price rate, it is often the case that you do not get back as much as you put in when you withdraw. There is a risk but the reward is good. The more people who enter, the more money you get. Simple staking is low risk and low reward. Yield firming is high risk and high reward. It depends on how much risk you can take.

Personally, I have no plans to make a yield firm for profit. I want to know and study.

I want to know like that, while studying, I'm already quite good at it. When I get the next chance, I will call a seminar and teach everything again.null