In this article, you will learn about earning yield using your crypto assets and YaspFi
Yield aggregators are a set of smart contracts that pool crypto assets (tokens) and invest them in a portfolio of yield-paying products and services through pre-programmed and automatically executed strategies.
Yield offers are analogous to investments, so as with any investment, there is always some risk involved. In DeFi yielding there are two main types of risk:
YaspFi has been scoring yield offers for technical and pool risks to help users navigate through great variety of DeFi yield opportunities.
You can get yield quickly and efficiently by providing the tokens you have to the available Yield Offers using the YaspFi web app or by providing tokens to liquidity pools in DEXes, lending, staking or other types of protocols, where these tokens are used to extract extra commission fee for liquidity. The benefit of using the YaspFi web app is having most of the yield opportunities in one place and being able to easily compare different opportunities from different protocols using Trust Score and other analytics that are a part of the web app.
Yielding in crypto refers to earning passive income or rewards from your cryptocurrency holdings. This is achieved through different types of DeFi protocols. You can stake your crypto by locking it in a network, earning rewards in the process. Another way is liquidity provision, where you add funds to a liquidity pool on a decentralized exchange, earning a share of the transaction fees. Additionally, lending your crypto allows you to earn interest, or you can participate in yield farming by moving your assets between platforms to capitalize on the best returns.
Generally speaking, income in DeFi comes from commission fees. Source of fees depending on type of DeFi protocol. For example, in crypto staking commission fees usually are paid from transactions made on blockchain. In case of liquidity providing, commission goes from swaps in DEXes or bridges. In lending protocols, commission comes from borrowers as an interest.
Impermanent loss happens when you provide liquidity to a liquidity pool, and the price of your deposited assets changes compared to when you deposited them. The bigger this change is, the more you are exposed to impermanent loss. In this case, the loss means less dollar value at the time of withdrawal than at the time of deposit.