My first experience on farming in DeFi (decentralized finances) tokens was with Uniswap native token UNI and thankful to the airdrop of 400 UNI tokens in September I could use the same to exchange some and earn more tokens giving liquidity to the WETH-DAI pool.
Of course the experience being new to me rose some questions into my brain, which led to make more research to find how could I use some of the earned tokens in Uniswap to make even more UNI assets. I had to choose the right pool that could made me to earn even more assets, not all liquidity pools gave that advantage on the Uniswap Protocol and was crucial to choose the right one.
what to choose ...big dilemma 🤑
So, in order to farm more UNi and Harvest even more of this asset I choose a pool which gave me those benefits and bought with the airdrop earned tokens some DAI stablecoin and left enough Ether to equal the number to deposit in the pool WETH-DAI, which could also give me even more UNI tokens.
With the tokens prepared to deposit in the protocol pool WETH-DAI, I made my bet and without thinking a lot i deposited the amount on the Uniswap exchange pool, with that deposit in the the pool protocol earned LP tokens from providing liquidity and use them to farm and harvest UNI assets.
I was marvelous seeing my assets growing daily and exponential increase my portfolio of assets. One of my biggest concerns when I deposited was to control my assets in real-time and in order to check them I had to use some tools that helped in that way:
This tools made my life more easier and I could use them to track my assets and check even how much I was making with my investment on the Uniswap liquidity mining. My harvest of UNI was good but like everything in life that didn't last long for me. In the beginning of my earnings in the pool WETH-DAI my returns was higher and earned 34% in APY, mining 1 UNI per week with an initial investment of $650.
The last days on the farm in the pool WETH-DAI on Uniswap, the earning fell to less than 13% APY and my harvest of UNI reduced to less than 0,60 tokens per week.
At all the earnings got bigger due to valorization of Ether in the market which gave me more returns from the pool, but I had to take all my money out to the pool and invest in other DeFi pool, this time in another protocol.
Well, my experience was good and I learned a lot in the ecosystem when at the same time I made some more tokens in return of farming my coins, the harvest was quite good!
Pros and cos of yield farming.
One thing that I love about DeFi ecosystem is that the system is decentralized, and the interaction with the protocol are done between smart protocol to smart protocol, also farming pools are very profitable with many offering huge returns on the investments made. But like anything in the business area is necessary to give a research, DYOR-do your own research, when deal with anything that needs investment online.
When the yield farming is highly profitable it can also be very tricky, many smart protocols can become scams anytime and after users put money into them, they can exit scam and exchange them into other coins that have more value in the market. Also there are risks with the hacking of the protocols with this criminals draining all assets on them if the ones doesn't have enough security and are unaudited, Uniswap protocol is one of the best and their farming pools are secure.
DeFi is a new trend on crypto and many are entering to the field but is crucial to be aware that risks can be associated with the field, it's necessary to read a lot about the ecosystem, make always a well and detailed study about it.
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Stay alive and enjoy the good things on it, Christmas is coming.
