How to Farm on Penguin Finance
To position Islander as a learn-to-earn & affiliate marketing platform promoting crypto adoption, Islander is not only a place where retail investors can find and learn from potential projects but also provides informative news. Currently, our primary goal is to serve as a springboard for the top initiatives in the Avalanche ecosystem. So, with this “Avalanche How-to” series, we will provide you with the fundamentals of this potential ecosystem.
The next post in our “Avalanche How To’’ series is about Farming on Penguin Finance.
But first of all, what is Farming?
Farming, also known as Yield Farming, is a term that refers to users trying to generate as much profit as possible from their crypto assets by providing liquidity to DeFi protocols.
In the concept of Yield Farming, Liquidity Providers will supply a pair of tokens in the Liquidity Pool and receive a special token call as an LP token in return, to know how much liquidity they have added to the pool. A liquidity pool is simply a smart contract that contains tokens in it. These pools allow users to borrow, lend or trade between tokens. By doing so, they are going to earn passive income from transaction fees, and interest from lenders. Users can even stake Liquidity Pool tokens to earn extra yield. Extra yield is frequently distributed by local tokens of DeFi protocols. In previous articles, we mentioned How to farm on Trader Joe.
Today we want to introduce you another tool to farm to earn more. Farming on Penguin Finance.
So, here’s how you can do that:
- Step 1: Choose Igloo (Liquidity pool) you want to add liquidity on Penguin Finance platform.
- Step 2: Add your tokens by clicking “Enable Farm”. Because Penguin Finance is using liquidity form Pangolin and Trader Joe, it might lead you to one of 2 exchanges above for liquidity adding.
- Step 3: After having added, you will receive an amount of LP tokens. Stake it and earn rewards.
There’s a few things you guys have to notice:
Farming can give you a high APY, but beware of Impermanent loss, which can lose your token. Our advice is that you should choose pairs of tokens, which have a top coin. Ex: AVAX/ISA, AVAX/PEFI.
