What is Yield Farming?
Yield Farming is like depositing your money in bank to get interest. But you get your interest in crypto. The real deal is when the coin appreciates. A new currency only has value if enough people use it, so there’s an incentive to issue new units to grow a user base. Through what is known as Dapp, your coin will be lent out to borrowers who often Use them for speculations. but for every day’s participation in the Compound service, you get new Comp coins, as well as interest and other fees. If the Comp token appreciates -- and it’s more than doubled in value since mid-June your returns skyrocket as well.
Risk for Yield Farming?
Well, since Crypto world is faced with a lot of coding, a particular crypto platform that offers yield Farming might be vulnerable to software hackers.
Also some times when a new token is been listed and farmed, it might go through Pump and Dump. Thereby leaving you with a lot of token but little value.