With the DeFi space exploding over the past couple months, it seems headlines of people claiming to earn upwards of $5k — $10k daily from yield farming are everywhere. To earn double most monthly salaries in a day seems too good to be true and while certainly possible in the magical world of Defi, it would require either massive sums of capital or a very high tolerance to risk. So, well outside what regular joes like you and me can achieve?
Not necessarily. Instead of focusing on the big headline numbers, this article is going to focus on how you can get started yield farming, with whatever you’re comfortable putting in. With daily ROI’s of 1.01%, $500 capital will see you netting $5.05 daily. A regular high street bank in UK will give you maybe $2.50 for that same $500… after a year. Now throw in the magic of compounding into the mix and suddenly, DeFi as a means of side income doesn’t seem too impossible anymore.
So let’s get started.
How to begin
The first thing you’ll want to do is download Trustwallet on your phone. This will act as your crypto wallet which will store all of the crypto you earn and hold. In addition, it has an in app browser that will allow you to connect your wallet directly to the project you want to work with. If none of that makes any sense, don’t worry! Check out my next article which attempts to demystify the common jargon found in crypto space.
From Trustwallet, you can buy BNB directly to fund your wallet. It’s important to note that you need to have at least a couple dollars worth of BNB to pay for gas fees, else nothing will happen when you follow the steps below.
Research
Next you’ll have to do some research, DYOR is a popular term in the crypto space to remind people to Do Your Own Research. Pick a project that you believe will prosper, or at the very least is safe from rugpulls. I personally make sure to join the telegram channels of any projects I choose, to get a sense of the community that’s backing the project. I look for signs that the community supports each other, seeing the founders of the project frequently speak to the users and accepting feedback. For this article, we’ll look at one such project, ApeSwap.
Using the Dapp tab at the bottom of your TrustWallet screen, type in apeswap.finance in the address bar. Make sure your wallet is connected by hitting Connect -> TrustWallet in the top right hand corner of the screen.
There are 2 main methods of putting your money to work here — farming and staking. In this article I cover farming, but head on over to my other article if you’re interested in what staking is. Neither are without risks and its up to you to decide what degree of risk you’re willing to accept.
Farming
To get started with farming, you’ll need equal amounts of the two tokens you intend to farm with. Mousey on over to the farms tab and you’ll see the different options available, along with their respective APR’s. For this example, let’s assume we’re interested in the BANANA-BNB farm.
Step 1 — Trading
You've already got some BNB from when you funded your TrustWallet earlier. Now you just need to trade some of that BNB for some BANANA — the native token used by the Apeswap project. So hit the Trade -> Exchange tab that’s immediately above the Farms tab circled in the picture above.
Fill in the amount of BNB you want to trade in (Remember! You need equal amounts of BNB and BANANA to farm) and Apeswap will update to give you a rough estimate on the number of BANANAS you’ll receive. The first time you trade any type of token, you’ll have to “unlock/approve” the token (1), which Apeswap will remind you to do. This does NOT mean you’ve trade your tokens, but rather just unlocked the ability to do so.
Finally, hit swap and provide confirmation in the next screen that pops up. Give it a minute or two and hopefully you can now see your BNB total (2) decrease and some new BANANA tokens in your wallet (3).
Step 2 — Providing liquidity
Step 1 done! Onwards to step 2 where you get yourself a third type of token — LP tokens. Start by hitting the Liquidity tab (4) highlighted in the picture above and then the Add Liquidity button on the resulting page. You should then see something that resembles the following:
Go ahead and select BANANA as the second currency, then the number of either currency you’d like to use to farm. Apeswap will automatically calculate the number of the other currency that you’ll also have to provide. For example, if you wanted to use 10 BANANA for farming ($66 worth at time of writing), you’ll also have to provide $66 worth of BNB.
Again, you might be asked for approval before being able to continue. This is normal and accepting this does NOT mean that you’ve gotten the LP tokens, but rather just approved the ability to do so. Go ahead and hit supply and accept the following confirmation screen.
After a few minutes, hopefully you’ll see the balance of your BANANA and BNB tokens dropping by the amounts you specified, which marks the end of step 2! One final step to go.
Step 3 — Farming… finally!
Pop back on over to the farms tab that you initially started at. Hit the Approve Contract button on the BNB-BANANA farm and go through all the regular motions you should now be familiar with. When you provided liquidity in step 2, you were given LP tokens in return, and this is what we’ll be using here.
Once you’re given the chance to, hit the little “+” sign and hit “Max” to fill in the form with the maximum number of LP tokens you own. There is absolutely no reason not to use the maximum amount so go right ahead and click Confirm.
Congratulations! You’ve now supplied liquidity to Apeswap and are now farming BANANA tokens. The counter “BANANA earned” keeps track of how many BANANAS you’ve got waiting for you. Come back in a day or two to harvest your profits!
Closing thoughts
In this article I mainly covered how to get your feet wet in the magical world of Defi. Of course, there’s plenty else to read up on and learn (eg what farms actually do?) before you want to sink your hard earned savings into magic internet money, so do check out my next article where I dive into a bit more detail about what exactly is happening behind the scenes in Apeswap.
