This time we will review Yield Farming and Staking in the cryptocurrency world for beginners. Maybe someone is still looking for the difference between the two things.
This explanation about Yield Farming and Staking was discussed in the Ngobras program at the VCGamers Official Discord on Saturday 20 August 2022.
VCGamers is known to have launched a named crypto asset $VCG Tokens. The crypto assets are on the Binance Smart Chain (BEP 20) and Ethereum (ERC 20) networks.
Currently, the crypto asset from VCGamers has been officially registered with the Commodity Futures Trading Regulatory Agency (Bappebti).
$VCG Token is also used as a medium of exchange in the first metaverse in Indonesia, RansVerse. Where, all transactions in the metaverse built on collaboration between RANS Entertainment, Shinta VR, VCGamers and UpBanx must use $VCG.
There are a number of features that are available to all $VCG Token holders. Among them, $VCG Staking and $VCG Swap & Bridge.
VCGamers also continues to provide education to the public regarding crypto investment. These efforts are carried out with various programs that have been launched. Like, TalkCommunity, Broke and other programs that can be followed by Join Discord VCGamers.
There are attractive prizes up to ROG Laptops that you can go home by participating in every event held by VCGamers in the program GamingYourWay.
Many things are discussed in the program. One of them is regarding Yield Farming and Staking.
What is the explanation about Yield Farming and Staking in the program Broke VCGamers?
Let's see!
Also read: $VCG Token Officially Registered at Bappebti
Yield Farming
Yield farming in simple terms is saving crypto assets by lending them to other users and getting rewarded in the form of results.
In order to lend crypto assets through Yield Farming, the owner only needs to save savings in a digital wallet and receive interest by saving it in liquidity pool. Liquidity pool accommodates crypto assets locked by smart contract technology.
Assets stored in the liquidity pool will provide benefits in the form of crypto with the amount depending on how large the percentage of assets stored is compared to the value of liquidity.
Yield Farming profits come from the amount of interest paid by borrowers or users of the liquidity pool.
In other words, Yield Farming has similarities with peer-to-peer lending platform funding activities where lenders invest their funds on the platform and earn profits from loan interest.
To do Yield Farming, users must be able to spend more time doing research every day and it is quite complex for new investors in crypto assets.
Currently, there are various kinds of DeFi lending and borrowing platforms that are used as containers for yield farming
- compound
- Aave
- Uniswap
- PancakeSwaps, etc.
Crypto Staking
Crypto Staking is validating transactions or all activities that occur on the blockchain system to gain profit. Previously, users had to store or lock their crypto assets in digital wallets for a certain period of time.
Crypto staking activities can only be carried out on a blockchain system with a Proof-of-Stake (PoS) algorithm. Within PoS, users can mine or validate crypto asset transactions according to the coins locked in the digital wallet.
The more coins that are locked, the more the user will have high bargaining power in staking activities.
There are four means that can be used for crypto staking, including crypto asset exchange platforms, cold wallets, special platforms for staking services, and DeFi staking platforms.
The five most used cryptocurrencies for staking are Ethereum, Cardano, Tezos, Polygon, and Tetha.
Even though it provides relatively smaller rewards compared to yield farming, crypto staking does not require intense attention from investors and is suitable for beginners.
Also read: 5 Benefits of Staking $VCG Token
The difference between Farming & Staking
We must know that there is a difference between Farming & Staking.
Among them are regarding profits, security and risk of non-fixed losses.
What's the explanation? Let's review!
Profit
- Crypto Staking
Offers a fixed reward, usually around 5% but can be higher depending on the method and crypto asset being staked.
Staking rewards are incentives given to validators for their contributions to the blockchain ecosystem to reach consensus and create new blocks.
- Yield Farming
Requires a more planned strategy and the method is not as simple as staking but can provide greater rewards, namely up to 100%.
Yield farming rewards are set by the liquidity pool and can fluctuate when the price of the crypto asset changes.
Security
- Crypto Staking
Crypto Staking: has strict rules and is tied to the blockchain consensus which can result in unscrupulous individuals trying to trick the system.
However, nowadays there are staking platforms which are designed to deceive users just like the fraudulent investment platforms.
- Yield Farming
Requires a more planned strategy and the method is not as simple as staking but can provide greater rewards, namely up to 100%.
Yield farming rewards are set by the liquidity pool and can fluctuate when the price of the crypto asset changes.
Risk of Unstable Loss
- Crypto Staking
No fixed losses.
- Yield Farming
The volatility of digital asset prices can be a risk of non-fixed losses.
About VCGamers
VCGamers is the pioneer of the Web 3.0 ecosystem for gamers in Indonesia. VCGamers was born from the gaming community and then built a marketplace to meet the needs of gamers
In mid-June 2021, VCGamers received seed funding of US$2.6 million or equivalent to IDR 37.3 billion led by Venture Capital Global, BEENEXT and Rans Venture.
In early 2022, VCGamers launched a crypto asset called $VCG Token which operates on the Binance Smart Chain (BEP 20) network and Ethereum.
This crypto asset has been listed on PancakeSwaps, UniSwap and Indodax and the public can buy it.
$VCG Token will later be used as a whole to support the VCGamers ecosystem.
$VCG is built on a platform-agnostic and game-agnostic social trading network.
There are a number of features that have been launched by VCGamers. Among them, $VCG Staking, $VCG Swap & Bridge.
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