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Farming is almost as old as the human race. We pick up a plow, sow the seeds, and grow our crops. But what is farming when we are talking about cryptocurrency? Well, rest assured you won’t need a tractor for this kind of farming! Farming is a term given to timed rewards released to liquidity providers or token holders who stake their holdings in a farming contract. This provides an incentive for users who either hold a certain token or provide liquidity to a token pair on a Decentralized Exchange (DEX) in the form of farming rewards. It can also be a successful way to distribute tokens and incentivize users for projects and developers. There are two types of farming you will generally see, and Crunchy offers both. There is Single-Sided Farming (SSF) and Liquidity-Provider Farming (LPF). SSF is a farm that utilizes a single token to farm, where LPF utilizes the LP of a token pair (an example is XTZ/CRUNCH).
Farming can prove to be a great way for token holders to be rewarded! When users stake their holdings required in a designated farm, they are paid out a dividend of rewards from a pool consisting of the rewards side of that farm. Many users take this opportunity to either stack their favorite asset in preparation for greater things to come or can be used as a passive “income” where users harvest their farms and sell their rewards. Farming is an easy and appealing process to both new and experienced users alike.
Single-Sided Farming (SSF) is the simplest farming concept with the least risk associated. When someone creates a single-sided farm, this simply means there is one token that will be staked, which will then in-turn generate rewards as long as that token is staked and the farm is still live. Due to the lower risk associated with SSFs, the rewards payout it usually a little lower when paired with LPFs.
Liquidity-Provider Farming (LPF) is the term used for a farm that utilizes the “LP” of a token pair to be staked in a farm. LP tokens are given upon the addition of liquidity to a DEX. The tokens will be staked into the farm and will generate rewards as long as that LP is staked that farm is still live. LPFs tends to be a little riskier than SSFs, so the reward payout tends to be higher when paired with SSFs to incentivize LP providers and offset Impermanent Loss. You can read a little more about impermanent loss (you can read more about impermanent loss here https://finematics.com/impermanent-loss-explained/.
So why Farm? Well as we mentioned earlier, farming can be a fun and rewarding process. By simply staking tokens you already own into a farming contract you now are increasing your passive income. Want to grow your stack of a certain crypto? Farming can be a great way to bolster your portfolio. Looking to have a passive income from your assets? Farming rewards are an easy way to establish a passive income. LP farming in particular on Tezos can be great, as most DEXs currently active provide baking rewards for your staked $XTZ in their liquidity pools!
So now that you understand a little bit about what farms are and how they can benefit you, lets take a look at how to farm on the Crunchy platform.
You will find that the Crunchy page has several different services that make us a Defi-as-a-Service platform. To get to the farming page, simply select the “Farms” category on the left side of the screen. This will take you to the farming page.
Now that you are on the farming page its time to connect your wallet to the Crunchy site. Once you connect your wallet on Crunchy it will stay connected no matter what page you navigate to on our platform. Perform the steps you see below and you will be connected and ready to farm.
Now that you are connected to Crunchy you can begin to farm! You will find that each farm has details about it listed in its particular data field. Lets take a look at what each part of the farm display.
You will see to hand icons in the previous photo. This is how you will stake your asset into the farm. You can use either method, the green stake button or the + icon, both buttons prompt the same function. Once you click on one of those, you will be asked how much you want to stake. You can either put in a specific amount, or you can select Use Max to stake all available holdings you have of this token.
Click on the blue STAKE button once you your desired amount to stake entered. Once you do this, you will get a transaction confirmation pop-up. Traverse through the steps to confirm the transaction again.
Now that you have staked your asset into the farm, what’s next? Well you can go and check out you staked tokens metrics in the farm! Make sure you are back on the main farming page. You can now to to the “Farms and Gardens” search bar and search for your farm. There are numerous ways to find it, but the easiest is to to the “categories” bar, clear all fields (usually “Farms” is already in that space) and scroll down to the Staked category. This will show only farms you have an asset staked in.
Now your farm(s) will show up on the dashboard! At this point you are ready to check out your farm. You will see the amount of tokens you have staked, the percentage of the staking pool your allocation holds, and the total rewards generated from your staking!
Now that you have staked, checked your farm and understand the different parts of the UI it’s time to claim those rewards! There are two ways to claim, either individually by clicking the blue Harvest button inside the farm or by clicking on the Harvest All icon. Harvest inside the farm allows you to only claim the rewards for that farm. Using the Harvest All feature allows you to claim rewards for any farm you currently have farms in.
Once you have selected to harvest your rewards, you simply just need to confirm the transaction! Once you do this give the operation about 30 seconds to complete and your farming rewards will now be in your wallet.
Congratulations! You now have completed your farming interaction with Crunchy farms!