The buzz surrounding yield farming these days has made several investors question the lucrativeness of the farming tokens.
Yield farming is adding more tokens to a pool of two or more coins to earn some profits.
Yield farming has been around for a couple of years, but many deter from involving themselves with it due to rug pulls and impermanent loss.
Yield farming is only as good as the liquidity protocols and the tokens farmed. Liquidity protocols provide liquidity to decentralized exchanges, aiding in the funding of orders.
An insecure liquidity protocol will put users’ investments at risk. If it’s unprofitable, investors will look the other way.
However, farming tokens are becoming more profitable these days, thanks to DeFi platforms like Ubeswap and tokens such as SOURCE.
SOURCE is the native token of ReSource Finance, a DeFi project running on the Celo blockchain that enables business owners to access uncollateralized loans using a system called Mutual Credit.
In a recent report published by UncleCelo, the token is amongst the top five pairs with the highest APY. The rewarding nature of farming this token is more than a reason investors should invest in the token.
Why Farming SOURCE is Rewarding
Interest-free credit lines that do not require collateral from the borrower are a novel and disruptive concept that will probably create a lot of traction in the coming month when ReSource hits mainnet. SOURCE, the project’s utility token, is required to access these credit lines and is also used to underwrite them. This means that the anticipated demand for interest free loans will probably translate into demand for SOURCE.
How to Farm SOURCE on Ubeswap
Farming SOURCE starts with purchasing the token first. If you hold a token that is traded on Ubeswap (such as CELO or mcUSD) you can just go ahead and buy SOURCE directly.
If not, you’ll need to purchase CELO first on an exchange that accepts your preferred method of payment (such as credit card for example). This is easy and goes as follows:
- Create an account with Coinbase or Binance. Once signed in, click on Buy/Sell and select CELO and the amount to purchase.
- Download the Metamask extension for Chrome or Firefox on your computer and set up the wallet. Then connect it to the CELO blockchain.
- Click on “Pay” in the top left corner and choose “Send.” Click on “CELO” enter the amount you want to send to your wallet. Copy your account address from Metamask (the one starting with 0x at the top screen) and paste it into the “to” field on Coinbase.
- Verify the details and select “Send.”
- CELO tokens will be deposited into your Metamask wallet. At this juncture, you should swap it for SOURCE.
- Go to Ubeswap, click on “Connect to a Wallet,” and choose Metamask. Go to the Swap page, select CELO in the first dropdown, and fill the amount in the blank space beside. Repeat the same for SOURCE in the second dropdown. Swap and confirm transactions.
- Since you are adding to a pool that contains both SOURCE and mcUSD, you will have to follow the same process to buy and swap to mcUSD.
- Once you’ve confirmed that both SOURCE and mcUSD are in your Ubeswap wallet, it’s now time to do the real thing – farm the tokens. Don’t be perturbed. This process is as easy as ABC.
- Go to “Pool” on Ubeswap and click on “Add Liquidity.” Choose SOURCE in the first blank area and mcUSD in the other input area.
- Farm.
As earlier said, the farming part is simple. Once you have farmed the tokens, you will receive your profits alongside your rewards when due automatically.
Farming is lucrative, and investors are jumping on the opportunity to maximize their capital income. Seeing the potential in the venture, it’s only a matter of time before yield farming takes over the DeFi world.
