With Ball Exchange Yield Farms, users can stake liquidity provider (LP) tokens to boost earning power through native token rewards.
Yield Farms allow users to earn $BALL while supporting Ball Exchange by staking LP Tokens.
What is Yield Farming?
Yield Farming is the process of using Decentralized Finance (DeFi) protocols to generate Interest on your Cryptocurrency Assets. There are various forms of Yield Farming, such as Providing Liquidity, Staking, or Lending and each option comes with different user considerations before participating. For the purposes of this page, we will focus on Yield Farming by Providing Liquidity.
How Yield Farms Work
Ball Exchange Yield Farms is designed to primarily incentivize users to provide liquidity for their favorite DeFi projects. Users who create and stake their liquidity provider tokens in a Yield Farm will earn $BALL utility tokens.
As a DeFi platform, liquidity is crucial to a healthy ecosystem. More liquidity available to Ball Exchange means more users can trade hundreds of their favorite tokens at low fees. Therefore, it’s in everyone's best interest to encourage liquidity for popular trading pairs on Ball Exchange, because popular trading pairs require more liquidity and generate more trading fee revenue.
For more info on liquidity provider (LP) tokens visit the Liquiditysection.
Yield Farm APR
Yield Farm APRs are determined by three primary factors: the price of the input LP token, the price of the reward token (i.e., $BALL), and the amount of input LP tokens in the pool. Let's look at how changes to these three factors affect the APR of a Yield Farm.
If the price of the input LP token increases, the APR will decrease, because each input LP token is worth relatively fewer reward tokens.
If the price of the input token decreases, the APR will increase, because each input LP token is worth relatively more reward tokens.
If the price of the reward token ($BALL) increases, the APR will increase, because the total value of the reward tokens received for the same number of input LP tokens has increased.
If the price of the reward token ($BALL) decreases, the APR will decrease, because the total value of the reward tokens received for the same number of input LP tokens has decreased.
If the number of input LP tokens staked in a Yield Farm increases, the APR will decrease, because the same amount of reward tokens are distributed against more input LP tokens.
If the number of input LP tokens staked in a Yield Farm decreases, the APR will increase, because the same amount of reward tokens are distributed against fewer input LP tokens.
Benefits of Yield Farming
Yield Farming can be a lucrative way to earn extra rewards, such as Trading Fees or Tokens.
Improve your asset’s capital efficiency by utilizing Idle Tokens sitting in your Wallet.
By Yield Farming you are also supporting the Defi Ecosystem you are participating in.