You know, I often see questions in the community about what farming is and how to make money with it. Let’s figure it out. Farming is essentially a DeFi strategy where you provide your assets to protocols like Venus, Aave, Lido and earn interest or tokens in return. Simple and clear.

Imagine: you deposit 1 ETH ( which is currently about $2.05K) into Venus and start earning weekly rewards. Sounds pretty good, right?

But there’s a more advanced approach, and that’s where we get into looping. Looping is a technique that allows you to increase your income, but it requires understanding the risks. The essence is that you provide an asset, then borrow part of what you’ve provided, and then re-deposit the borrowed amount. Repeat this process several times. The goal is obvious: the more assets working for you, the more interest you collect.

But here’s the catch. Looping isn’t just a way to boost profits; it also increases risks. The main danger is liquidation. If the price drops too sharply, your assets could be forcibly sold. So always keep your LTV below 50%. This is not a joke.

For beginners, I recommend first forgetting about looping and focusing on a safe strategy. Choose proven protocols. Venus on BSC is good for ETH and SOL, Aave works on Polygon and Ethereum, Lido is suitable for staking ETH, Marinade for SOL ( roughly $80.57 per coin). All these protocols have undergone audits and have a good reputation.

Start simply by providing assets without borrowing. Forget about looping in the initial stage. Your goal is to protect yourself from liquidation. Start with small amounts, gradually accumulate, and after a month, evaluate the results. Has the value of your assets increased? Is it worth your time?

The process is simple: send assets from your Web3 wallet to the protocol, earn interest, and see your balance grow every day. Maybe not dramatically, but it’s growing.

Once you get comfortable with basic farming and understand how protocols work, you can gradually explore looping. It’s a more complex strategy, but it requires experience and discipline. Don’t rush into it.

Overall, farming is a great way to earn passive income on the crypto you already have. The main thing is to start small, choose reliable protocols, and not chase maximum profits right away. Consistency and caution are your best friends in this game.