Crypto Weekly # 119 – Cryptocurrency news of the week

News about Bitcoin and cryptocurrencies is in constant turmoil. It may happen that vital information gets lost in the daily news flow and you miss important points.

This format is there to remedy that. We come back to the news of the past week in the Crypto Weekly to keep you informed on the current situation of cryptocurrencies.

For the unmissable corner of this week we will come back together on the DeFi phenomenon of the year 2020: Yield Farming

Before understanding the phenomenon of yield farming , let’s come back to the emergence of this term.

At the end of 2019, more and more protocols hosted on Ethereum began to be talked about. Uniswap , Compound or even Aave : their names are probably not unknown to you.

Until now, the mechanisms have been relatively basic: you deposit cryptocurrency on the protocols and you were rewarded with fees , whether generated by exchanges, in the case of Uniswap, or generated by the loans taken out. by other protocol users.

Synthetix: the father of yield farming

However, that all changed with the arrival of the Uniswap pool funded by Synthetix . Synthetix wanted to find a way to entice users to provide liquidity when exiting the sETH / ETH pool on Uniswap. To do this, Synthetix has started rewarding early participants by paying them SNX tokens. As a result, the providers in this pool generated 2 types of rewards :

Rewards from exchange fees generated by the pool;

The SNX rewards from the Synthetix incentive.

This is how the term yield farming came to be. He later democratized with the proliferation of governance chips through DeFi ecosystem.

Do not hesitate to consult the article in its entirety to discover yield farming strategies: What is yield farming?