What is deflationary farming?

REMINDER: It’s the BIG PUMP day at Rootkit today as it is pumping all UpTokens. Big rewards await you!!!

Now for today: Before we look at what Deflationary Yield Farming is, let’s have a look at the convention Yield Farming in DeFi.

Through Yield Farming, we are basically giving our funds to the blockchain which then earns profits through it and as a return, you earn interest on your funds.

Yield Farming seems all fun until you get to know the drawbacks.

Whenever Yield Farmers try to borrow and lend in quick succession in order to increase the minable revenue from the liquidity pool, they are vulnerable to liquidation. This can happen as the value of the coin used as the collateral decreases and can generate a major loss.

Not just this, Yield Farming actually puts down capital to earn something that you and others are trying to sell. This generates higher demand in the short-run which eventually destroys the value of the underlying token because of inflation of the supply.

Now to tackle this, we have Deflationary Farming!

Deflationary Farming maintains the value of the underlying token by:

  1. Charging a token transfer fee
  2. Allowing users to earn fee whenever they farm

One great platform doing so is Rootkit Finance. This makes sure to control inflation as it progressively adjusts the APY. Deflationary Yield Farming by Rootkit is the new big thing in the DeFi ecosystem.

They are providing users with one of the fairest Deflationary Farming services so far and what makes them unique is the fact that the liquidity is locked forever. It is designed in a way that the underlying liquidity can be moved to fund trading pools and provides liquidity without affecting the core of the main pool.