🧑‍🌾Yield Farms

Yield farms are another innovative concept that originated in DeFi and have since become integral to the ecosystem, especially for Automated Market Makers (AMMs) like DonkeyFinances. When combined with liquidity pools, yield farming provides users with an additional way to maximize their earnings.

Yield farms utilize Donkeyswap Liquidity Provider (DONLP) assets, which are given to liquidity providers (LPs) when they provide liquidity to a pool.

These DONLP assets represent an LP’s share of a specific pool and can be “staked” in a yield farm. LPs who stake their DONLP assets in a farm earn additional $DON rewards on top of the swap fees they already receive. Alternatively, DONLP assets can be held to accumulate swap fees alone; yield farms simply provide an additional opportunity to increase earnings on the liquidity an LP has provided.