Is stablecoin yield farming a good investment?

Asked 2 years ago

I've only heard good things from my friends who have gotten into yield farming over the past couple of years. As someone who is always interested in a good investment opportunity, I feel like I want to take part in it as well! I've done a bit of reading on stablecoin yield farming, but I have some questions before I dive into it- Is stablecoin yield farming a good investment? Thank you!

Antonio Marshall

Thursday, June 02, 2022

While you can make more profits by yield farming with standard crypto like Bitcoin, you are faced with the risk of impermanent loss. This is every yield farmer’s worst nightmare. However, when you farm using stablecoins, you significantly minimize the risk.

Since stablecoins are pegged to fiat currency and commodities, their value remains stable throughout. For instance, when Bitcoin and altcoins fell considerably recently, stablecoins dropped marginally (about 0.45 to 0.3%) and recovered in time. Therefore, yield farming stablecoins is a good investment as you will mitigate the risk of impermanent loss while generating profits.

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