How Do I Automate Yield Farming?

Learn about the basics of yield farming and how to automate it for big profits while minimizing risk.

Filip Dimkovski
By Filip Dimkovski
Siphokazi Mdidimba
Edited by Siphokazi Mdidimba

Published May 30, 2022.

What Is Automated Yield Farming?

The process behind yield farming is achieved by using the DeFi (decentralized finance) approach to give out crypto in a "farm"—which will then give you returns. Depending on the farm, yield farms can give a return of anywhere between 3-5% for big cryptocurrencies, up to massive returns.

However, no big returns come without sizable risk. There are many risks of yield farming, this is why crypto enthusiasts have come up with innovative ways to go around it. One of the best ways to ensure that you're maximizing your profit and avoiding loss is with automated yield farming—a method that consistently gives you the highest returns and focuses only on holding profitable positions.

How to Automate Yield Farming

Many DeFi platforms have their own yield farms. For example, at PancakeSwap, the GMI-BNB farm offers a yearly 165% return, but by the time you read this, the farm's return has probably already changed. So, with automated yield farms, the goal is to consistently have your crypto in the best yield farms so that you can have the biggest yield farming profit.

To automate yield farming, you first need to set up a hot wallet—a wallet that's always connected to the internet. Then, with a blockchain explorer and an EtherJS script, you can define a way that your crypto will always move to the yield farm with the highest APR.