Recently, it can be noticed that the crypto world is in increasing need of fast and secure transactions. So, many traders and farmers began to study the Polygon, formerly known as the Matic network. The Polygon also supports profitable farming, which will be discussed today, which gives users many new opportunities and good earnings.
Well, let’s get started!
What Is Yield Farming?
Yield farming is a way to get rewards and profit from your cryptocurrency assets by protecting them on the DeFi platform.
On most platforms, users place their assets in liquidity pools or place their assets using smart contracts. In exchange for providing liquidity to the platform through their assets, rewards and returns are generated in a currency-denominated token or the platform’s DeFi token.
Most popular Polygon profit farms use an automated market maker Model (AMM). Assets can be traded automatically without permits, using liquidity pools instead of the traditional buyer and seller market.
What Is Polygon?
Polygon (Matic Network was the first name of the project) is a sidechain or a subsidiary of the Ethereum blockchain, created to speed up the work of decentralized applications and smart contracts. Polygon has recently become very popular in the DeFi space. Especially for platforms and protocols built based on Ethereum. Polygon ecosystem has many advantages for its users. For example, such as:
- Higher yields due to the relative infancy of the network.
- Instant completion of transactions.
Polygon MATIC is also an ERC-20 standard token (Matic tokens), so it can be stored on any Ethereum wallet, including Eidoo and Metamask.
How Much Can I Earn Using a Yield Farm?
As there are so many platforms, the rewards you can earn vary. The most popular platforms offer anywhere between 10-50% yield on major assets such as:
- Polygon (Matic)
- Bitcoin (BTC)
- Ethereum (ETH)
- Stable coins like USD and USDCHF
Other platforms offer higher yield rewards when using the platform’s native token or more speculative assets. On DeFi platforms, rewards can fluctuate based on price action and liquidity, so it’s worth ensuring the yield percentages offered are stable.
Yield farming rewards are calculated annually, meaning they’re displayed as the returns that you could expect over a year. The most commonly used metrics are Annual Percentage Rate (APR) and Annual Percentage Yield (APY). APY takes into account the compounding of your assets, while APR doesn’t.
Top 3 Yield Farms on Polygon
Now we’ve answered some questions you might have about yield farming, let’s move on to our rundown of the top 5 yield farms (yield farming opportunities) on Polygon —
QuickSwap is top on our list of the top yield farms on the Polygon network. Quick Swap is a leading DEX and AMM on the Polygon network. It’s a fork of Uniswap, the leading Ethereum-based DEX.
It currently has close to $500m in TVL and assets locked into its liquidity pools (liquidity pool), and due to the increasing popularity of Polygon, that number is sure to rise following further adaptation. Since launching in February 2021, QuickSwap has attracted large amounts of liquidity and volume to its platform.
By becoming a liquidity provider or starting yield farming on QuickSwap, users will receive LP tokens and earn rewards in the native token, QUICK. The available liquidity pools provide highly competitive yield returns on many leading and Polygon-based assets, along with a simple interface that makes DeFi easier.
Aave is a non-custodial liquidity protocol that specializes in the lending and borrowing of assets. On Aave, users can deposit their assets as collateral and “borrow” against them or simply “lend” them via deposits to Aave and generate yields.
Aave allows users to borrow and lend close to 20 leading Cryptocurrencies(as a centralized exchange), attracting a large portion of investors looking to maximize returns on their assets. Another benefit to users is how borrowers on Aave can alternate between fixed and variable interest rates.
Aave is heavily used by yield farmers on Polygon and is the most popular DeFi platform on Polygon, securing close to $8bn of collective assets on Aave. Their deposit and borrow yields for leading Stablecoins and assets such as BTC and ETH remain extremely competitive. They are attracting many DeFi investors that wish to use the Aave platform but without high gas fees from interaction with smart contracts.
Sushi Swap is known primarily for its DEX but has recently expanded its range of apps to lending, staking, and yield farming solutions. Originally a fork of Uniswap, Sushi Swap has grown considerably since the DeFi space exploded. It remains one of the more popular yield farms on Polygon for novice and experienced DeFi users alike.
Their network integration with Polygon was launched in early May, and since then, the TVLand volume of Polygon on SushiSwap has exploded. The TVL of Polygon assets on Sushi Swap is approaching $1bn, with leading assets like BTC, ETH, and Stablecoins providing generous yield rewards through their liquidity pools. They recently released Bento Box, a lending and borrowing platform that provides highly competitive yields on popular assets and Stablecoin pairings.
As the DeFi space continues to grow, there will naturally be new high-yield farming options as more and more investors seek to use their assets efficiently and maximize their profits. It is worth noting that more and more projects are appearing in the Polygon ecosystem, but the yield growth shows no signs of slowing down for both retail players and veterans.
Recently, the Polygon has been showing amazing results. Let’s take, for example, at least the transaction speed that it provides to platforms. Many experts believe that the Polygon has not yet shown its maximum, and everything interesting is still ahead.