Yield Farming
How to get started earning yield on Step and Solana
'Yield farming' is the terminology used in DeFi to describe the process of earning additional tokens for providing liquidity in some form. That might be staking a single token or staking a pair of tokens (an 'LP') somewhere and earning additional tokens as a reward for doing so.
You often need to 'claim' these additional tokens meaning you need to press a button to commence a transaction to claim the reward which will then be sent direct to your wallet. At that point you may decide to keep those tokens, sell them for something else or reinvest them ('compound') into the thing you were earning yield on.
At Step we display both numbers so you have the most information available to you at any time, some other platforms only quote one or the other so it is important to understand that before making an investment decision. If you see an APY number you need to understand that number would only be achievable if you reinvested all of your yield for 1 year and prices and the rate stayed the exact same as today (highly unlikely). APRs are an indication of what you could earn over one year if prices and rates stayed the same and you never reinvested your yield, you can often take an approximation of APR by dividing the number by 365 to get a daily yield which is how most DeFi pros think about things.
Step is designed specifically for yield farmers to make their lives easier and provide the necessary information to make informed investment decisions. You can enter, manage, claim rewards and compound your yield farms from within Step, below are some of the options:
The Step AMM provides a number of pools for almost every coin on Solana. Each of these pools have an associated yield, they are all viewable on the Opportunities page within step.
You can enter these yield farms by following the instructions in the next section 'Adding and Removing Liquidity'.