Yield farming has become a very popular way of investing in cryptocurrency due to its potential for high returns. Yield farming, also known as liquidity mining, is when you put your tokens into a liquidity pool on decentralized finance (DeFi) platforms and earn rewards in the form of new tokens. This can result in a large increase in your crypto holdings, making it an attractive option for those looking to increase their investments.
Read more about yield farming
Yield farming is also a great option during bear markets when cryptocurrency prices tend to be low. By investing in liquidity farming, you can earn additional tokens while holding on to your existing wealth. This can help you minimize losses and even make profits during a bear market. Besides, yield farming can also help protect you from inflation as you earn rewards that keep up with the rate of inflation. What Else Can You Do During a Bear Market? Find out here.
CrowdSwap has been diligent and is always improving their game when it comes to creating yield farming opportunities for users. The project has recently added even more yield farming options, giving investors more chances to earn rewards for their crypto investments. Also, CrowdSwap is constantly tweaking and tweaking its yield farming process to ensure users are getting the best possible returns. This includes offering more flexibility in choosing the tokens they want to use for yield farming.
In addition, there will be other exciting news in 2023 that will make it more attractive that we will surprise you with! In this article, we take a look at three different options offered by CrowdSwap: Invest by Pair, Invest by Swap, and Invest by Crosschain. Let’s take a look at these three options currently available to CrowdSwap users.
Scenario 1: Invest in pairs
The first option is called “Invest by Pair”, which is incredibly simple; and of course recommended by CrowdSwap! You don’t have to worry about token swaps, so you can avoid problems like price impact too high error or high demand during liquidity pool launch. To use this option, you must have both tokens present in the liquidity pool pair and assign the same value to both tokens.
Suppose you have tokens A and B worth $200. If Token A costs $1 and Token B costs $2, you must wager 100 of Token A (worth $100) and 50 of Token B (also worth $100). This means you can invest in a liquidity pool without worrying about the hassle of token exchanges or unexpected complications. Let’s dive into a more practical example.
In the example above, let’s assume that the user has both MATIC and CROWD tokens in their wallet. The app automatically calculates the required amount of both tokens (in dollars) based on the current market price and forms a pair. Once you click the Invest button, you’re done! In this case, 10.4 MATIC is worth around 199 CROWD. Of course, you can invest a different amount as long as you have enough of both tokens in your wallet.
Scenario 2: Invest via swap
Suppose you are interested in investing in a liquidity pool that requires both token A and token B, but you only have token A. This is where invest by swap comes in. If you choose this option, CrowdSwap will automatically swap half of your token A for an equal value of token B and create a pair for you in the liquidity pool. This means you don’t have to worry about buying Token B on an exchange or finding a way to trade it yourself.
The beauty of this option is that it simplifies the investment process and makes it easier for those who only have one token to participate in liquidity pools. The system handles the exchange for you, which can be a great relief if you are unfamiliar with token exchanges. But that’s not all! If you have a different token than the pair, but are on the same network, this option will also come in handy. Let’s make it a little more real.
In the example above, the user has MATIC on their wallet, which is in the same network (polygon) as the selected liquidity pool on CrowdSwap (USDC/CROWD). Then the system exchanges the selected amount of MATIC for an equal amount of USDC and CROWD. Then the system will ask you to confirm the transaction and that’s it.
It is important to note that this option only works if the token of your choice (MATIC) and the token pair (USDC/CROWD) are on the same network (in this case Polygon). If not, you may need to use the Invest by Crosschain option, which is the third scenario.
Scenario 3: Invest via crosschain
Let’s say you have a token that you want to invest in a liquidity pool, but it’s not on the same network as the tokens in the pool. The “Invest by Crosschain” option makes sense in such a scenario. With this option, the CrowdSwap platform will automatically swap your token for an equal value of Token A and Token B, which are the tokens in the liquidity pool pair. Once the swap is complete, the system creates a pair for you in the liquidity pool.
This feature allows you to invest in a liquidity pool even if you don’t have the same tokens that the pool needs. This means you don’t have to go through the hassle of swapping your token for the required tokens on a centralized exchange or through a complicated process. CrowdSwap has made it as easy as possible, allowing you to invest in the liquidity pool with just a few clicks.
Let’s say you have $200 worth of token C which is not on the same network as token A and token B, the tokens in the liquidity pool pair. Token C is worth $4 per token, so you have 50 Token C in total.
To invest in the liquidity pool, you would need to swap your token C for token A and token B. However, this can be a complicated process and involve multiple steps, e.g. B. Finding a crosschain DEX platform or using a centralized exchange.
With the Invest by Crosschain option on the CrowdSwap platform, you can easily invest in the liquidity pool without going through all these steps. This is how it works:
- You choose the “Invest by Crosschain” option on the CrowdSwap platform and enter the amount of Token C you want to invest, in this example $200.
- The CrowdSwap system calculates the value of Token A and Token B based on their current market prices. Let’s say token A is worth $1 and token B is worth $2.
- The system will automatically exchange your $200 token C for an equal value of token A and token B. That means you would receive 100 token A and 50 token B in exchange for your 50 token C.
- The system creates a pair for you in the liquidity pool with your 100 tokens A and 50 tokens B.
So in the end you can invest in the liquidity pool with Token A and Token B without going through the complicated process of swapping your Token C for yourself. The CrowdSwap platform takes care of all the details for you, making it an easy and straightforward process. An example from the CrowdSwap app would look like this:
In the example above, the user has selected the WOM/BUSD liquidity pool to invest in. Since the liquidity pool is on the BNB Smart Chain (BSC) network and the user’s funds (CROWD) are on the Polygon network, it is a crosschain solution chosen for them. By pressing the “Cross-Chain-Invest” button, the system will perform a cross-chain swap and create the liquidity pool with BUSD and WOM tokens. just right? This is how CrowdSwap makes it easy for its users.
Get hands-on experience with these yield farming options in the CrowdSwap app.
How do I withdraw the pool rewards?
After making your investment using one of the three options offered by CrowdSwap, you can sit back and watch your investment grow. As more people trade the tokens in the liquidity pool, the price may fluctuate, leading to potential profits. And when you’re ready to withdraw your rewards, CrowdSwap offers an easy-to-use interface to guide you through the process.
By selecting the option to withdraw rewards from the dropdown menu in your CrowdSwap account, you can easily transfer your earnings straight to your wallet. Simply select the “CROWD Reward” option from the menu and the funds will be sent to the same wallet address where you made your investment.
Just a quick reminder, the tokens you earn as rewards may vary depending on the investment opportunity you choose. So if you invest in a CROWD opportunity, you will be paid in CROWD tokens, but other platforms may pay you out in other tokens. For example, PancakeSwap opportunities will give you the rewards in CAKE.
Background processes in CS Liquidity Farming
Okay, so when you decide to take a liquidity farming opportunity, there are a few things going on behind the scenes that you might like to know about. So here is a brief explanation of what happens behind the scenes for all three options:
- “Invest by Pair”: You invest in the liquidity pool by using both tokens in pairs. The CrowdSwap platform automatically calculates the ratio between the two tokens based on their market prices and creates a pair for you in the liquidity pool.
- “Invest by Swap”: You invest in the liquidity pool by swapping one of the tokens in the pair for the other. The CrowdSwap platform automatically calculates the ratio between the two tokens based on their market prices and swaps your token for an equivalent value of the other token. Then the platform creates a pair for you in the liquidity pool.
- “Invest by Crosschain”: You invest in the liquidity pool with a token that is not on the same network as the tokens in the pair. The CrowdSwap platform will automatically calculate the value of the token you have and swap it for an equivalent value of the two tokens in the liquidity pool pair. Then the platform creates a pair for you in the liquidity pool.
With all three options, the CrowdSwap platform handles the calculations and swaps required to invest in the liquidity pool. This makes it easier for users to participate in liquidity pools without having to deal with the complexities of token swapping themselves. So all you have to do is choose it!
Diploma
Liquidity farming can be a pretty sweet way to make some money, but you have to know what you’re getting into. Overall, CrowdSwap is a super convenient platform for those looking to get involved in decentralized finance. Whether you have both tokens, just one of the tokens, or a token on another network, CrowdSwap offers options to make it easier for you to participate in liquidity pools.
By providing user-friendly options and simplifying the investment process, CrowdSwap helps make decentralized finance accessible to everyone. So you don’t need to worry about investing in liquidity pools anymore, just hop over to CrowdSwap and get your investments rolling!
And it’s always a good idea to keep an eye on market conditions and the performance of the tokens in the pool so you can make smart decisions about your investments. Keep an overview and don’t forget: Patience is the be-all and end-all on the financial markets!
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