QuickSwap: A quick look dual-farming with QuickSwap.

DeFi is an acronym that means “decentralized finance.” It encompasses of all the Dapps created on top of blockchain networks like Ethereum. It works similarly to a regular banking system in that it allows users to purchase, sell, lend, and borrow cryptocurrency.

Using DeFi lending services and liquidity pools, cryptocurrency investors can simply earn passive income. Many loan platforms have been developed since the DeFi space exploded in 2020, allowing consumers to become Yield Farmers. Since then, many cryptocurrency fans have debated the merits of yield farming vs. staking, and which is the superior option.

DeFi yields can be collected in a variety of ways. Cryptocurrency owners must choose the best strategy to use their funds and receive the most benefits. One of the ways investors can earn in DeFi, is the dual-farming technology.

Dual farming is a staking incentive system in which liquidity providers (LPs) are compensated for their liquidity with two coins rather than just one.

Polygon awarded QuickSwap a $1 million donation (in $MATIC) earlier this year to help launch their DEX with more liquidity and promote dual farming incentives for certain pairs. These pairs include:

  • MATIC-ETH
  • MATIC-USDC
  • MATIC-USDT
  • MATIC-QUICK

This means that liquidity providers will now have the opportunity to receive a share of the trading fees collected by the DEX from the relevant pair, and these bonuses will be distributed at numerous daily periods and are automatically credited to the LP’s account. They are compensated in the pool’s two assets.

Another important benefit is that after depositing liquidity, LPs deposit their LP tokens to earn $QUICK & $MATIC.

By increasing pool APYs, dual incentives can supplement liquidity provider returns. LPs who get rewards in two digital currencies may benefit from enhanced asset diversification and reduced volatility.

Compared to dual farming, with $QUICK staking, users may use the dragon lair to single-asset stake $QUICK, QuickSwap’s native token, and gain a share of the platform’s revenue (paid in QUICK). There is no chance of impermanent loss with single-asset staking, and users obtain dQUICK, a staked-representative asset.

However, with dual farming, users may join 50/50 dual farming liquidity pools that give out MATIC and QUICK payouts. Nonetheless, there’s a chance that the users might experience impermanent loss.

The biggest disadvantage of participating in any type of liquidity provision, including dual farming, is the possibility of experiencing temporary loss. The possible loss incurred when providing liquidity for a pair is referred to as Impermanent Loss (IL). It occurs anytime there is a significant price difference between tokens. The losses are called “impermanent” because if one continues to provide liquidity for the pair, the losses may be reversed if the tokens given revert to their previous ratio. This means that dual farming is also at LPs risk.

Although all liquidity pairings face the danger of temporary loss, liquidity mining incentives (especially dual farming rewards) mitigate this risk by providing large APYs.

QuickSwap is a fork of Uniswap developed by Nick Mudge and Sameep Singhania on the Polygon blockchain platform. QuickSwap is a permission-less decentralized exchange (DEX) based on Ethereum but powered by Polygon’s Layer 2 scalability infrastructure.

To learn more about the basic features of QuickSwap, you can join and follow all of the project’s socials:

DEX | Twitter | Telegram | Announcements | Medium | Discord | Reddit

FrontEnd Developer | Machine Learning Enthusiast | Digital Marketer | Content Creator | Rugged Christian