Providing Liquidity and Yield Farming in DeFi: Process, Benefits and Risks

So what is Providing Liquidity

Different combinations of Supply of Tokens A and B that keep the Constant Product AMM at a 50/50 Ratio

So what is Yield Farming

What are the Risks?

Stylized Example Showing Impermanent Loss and Yield

P&L from Hodling the initial supply of both tokens (Orange) versus Providing Liquidity & Yield Farming (Blue)
The difference between Hodling both tokens vs Providing Liquidity (orange minus blue above)

How Do I Provide Liquidity and Yield Farm (Solana Example)

About the Author

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