Farming guide
Last updated
Last updated
Yield farming is a dynamic method for earning rewards using cryptocurrency assets. By lending crypto on decentralized exchanges (DEXs) to bolster liquidity for trading, yield farmers can earn fees and interest on their deposits. This innovative approach enables users to leverage their digital assets, generating returns instead of merely holding them. As trading volumes increase, so do the fees distributed to liquidity providers, making crypto farming an enticing avenue for maximizing returns.
Kibble Yield Farming is a non-custodial, multi-chain yield farming optimizer that lets users choose and manage liquidity pools across a number of Automated Market Makers (AMMs) and DeFi lending platforms.
Kibble Yield Farming is designed for both beginners and advanced DeFi users, offering a seamless way to manage liquidity across multiple protocols without needing to navigate each one individually. Users maintain full custody of their funds, interacting directly with AMM smart contracts while benefiting from advanced analytics and automation.
Phase 1: Avalanche Ecosystem—Initial deployment focused on Avalanche-based DeFi protocols.
Phase 2: Multi-Chain Expansion—Integration with Ethereum, Base, Bera, and Sol.
Kibble continuously aggregates data from various Automated Market Makers (AMMs) such as Trader Joe, Pangolin, and Pharaoh. It displays live information on:
Annual Percentage Yield (APY): Current and historical yield rates.
Trading Volume & Liquidity Depth: Insights into pool activity and potential fee revenue.
Impermanent Loss (IL) Risk: Evaluations based on price volatility and historical performance.
Reward Incentives: Details on protocol-specific rewards (e.g., JOE, PNG).
Example: A user chooses the AVAX/USDC.e pool on Trader Joe, where the pool offers an attractive APY and balanced IL risk. After depositing the assets, the user receives LP tokens that represent their share in the pool, while Kibble monitors performance in real time.
Once liquidity is provided, Kibble tracks several key metrics in real time:
APY Fluctuations: Updates on yield changes influenced by market conditions.
Trading Fee Accrual: Estimation of fee income from swaps occurring in the pool.
Impermanent Loss Analysis: Continuous assessment of potential and realized losses due to price movements.
If the system detects significant drops in APY or rising IL risks, it alerts the user with recommendations. For example, if the current pool’s yield decreases or IL increases dramatically due to market volatility, Kibble might suggest considering an alternative pool with better risk-to-reward metrics.
Example: The AVAX/USDC.e pool might generate modest fee revenue, but if AVAX experiences a sharp price decline, Kibble’s IL tracking module will provide alerts and visualizations to help the user understand the potential impact on their returns.
By providing liquidity, users earn reward tokens such as JOE, PNG, or USDC depending on the AMM used. These rewards accumulate over time and contribute significantly to overall yield.
Kibble offers flexible harvesting mechanisms:
Manual Harvesting: The user can initiate a harvest at any time via the dashboard.
Automated Harvesting: Users can set thresholds (e.g., harvest once rewards exceed a certain amount) or schedule periodic harvesting. Kibble then executes the harvest transaction when conditions are optimal—factoring in current gas fees to reduce costs.
Example: A user farming on Trader Joe accumulates JOE tokens. Kibble’s auto-harvest feature can be configured to trigger a reward claim whenever the tokens exceed a user-defined threshold, ensuring that rewards are collected at cost-efficient times.
This compounds the user's earnings, thereby increasing the liquidity position and future yield. If another pool offers a higher APY or lower IL risk, Kibble can facilitate a move to optimize returns.
Example: After harvesting 15 JOE tokens, Kibble might offer the option to reinvest these tokens into a staking program with a higher APY or further investment in another opportunity.
Users have the freedom to withdraw their liquidity at any point. Upon withdrawal, Kibble provides a detailed breakdown of:
Initial Capital: The original amounts deposited.
Accumulated Earnings: Gains from trading fees and yield rewards.
Impact of Impermanent Loss: Adjustments made to the gross returns based on IL calculations.
Transaction Fees: Final gas and platform fees deducted from the withdrawal.
When a user decides to leave the AVAX/USDC.e pool after a period of yield farming, Kibble figures out that the final balance is made up of the initial deposit plus any fees and rewards that have been earned, minus any temporary losses that have been incurred during the period.
Kibble's design supports multiple blockchains, despite its initial focus on a single chain. It provides:
APY Comparisons Across Networks: Users can evaluate yields on different chains like Avalanche, Ethereum, BSC, and Base.
Seamless Bridging: When better opportunities are detected, Kibble offers one-click solutions to migrate liquidity across chains using optimized bridge protocols.
Farming APR isn't just one number! It's a combination of two key rewards:
LP Rewards APR: This is the portion you earn for providing liquidity to the pool. It's calculated based on the trading fees generated within the pool and your share of the liquidity.
Farm base rewards APR: This APR rewards you for staking your LP tokens in the farm. Essentially, you earn KIB for locking up your liquidity provider tokens (LP tokens).
Breaking down the numbers:
Farm Base APR: This depends on the farm's multiplier and the total liquidity it holds. More liquidity typically leads to a lower base APR, as the KIB rewards are spread across more participants.
LP Rewards APR: This is calculated based on the pool's liquidity and trading volume. Higher trading volume generally translates to a higher LP reward APR, as there are more fees to be distributed among liquidity providers.
Remember: Yield Farm APR is an estimate based on current pool conditions. It can fluctuate depending on factors like trading volume and liquidity levels.
Locate your farm: Visit the Farms page to see a list of available Farms.
Provide liquidity to create a position: Choose your preferred pair and simply click it to open up the “Add Liquidity” windown without leaving the Farm page.
Enter the amount of token: Enter the amount of 2 tokens in the trading pair you chose before and Click “Add Liquidity” on the position listed, and your wallet will ask for confirmation.
Confirm transaction in your wallet.
Start farming with your LP: Transfer your LP after completing Add Liquidity, you can earn rewards from it
Harvest your rewards:
To harvest KIB rewards from a staked position, simply return to the Farm page, and locate the farm and position you want to harvest.
Click “Claim Rewards” on the position, and your wallet will ask for confirmation. After a short wait, the KIB rewards will be sent to your wallet.
To unstake, simply return to the Farm page, and locate the farm and position you want to unstake.
Click “Unstake” on the position, and your wallet will ask for confirmation. After a short wait, your LP token will be returned to your wallet, along with all the pending KIB rewards.
To become a Liquidity Provider (LP) on Kibble, users first need to add both types of tokens to the Liquidity Pool associated with their desired trading pair. For instance, if someone wants to provide liquidity to the KIB/TON pool, they would need to deposit a corresponding amount of KIB and TON tokens into the pool. These deposits should ideally be made in such a way that their combined value, when converted to USD, is equal for both tokens.
Upon depositing tokens into the Liquidity Pool, LPs receive liquidity provider (LP) tokens in return, which represent their share of the pool. These LP tokens serve as proof of ownership and entitle the holders to a portion of the trading fees generated by the pool. LPs can earn passive income by participating in liquidity mining or farming, where they stake their LP tokens to earn additional rewards.
As users provide liquidity to the pool and facilitate trading activity, they earn rewards in the form of additional tokens. These rewards are distributed to liquidity providers as an incentive for their participation in the liquidity pool.
The rewards can be distributed in various ways, such as:
Trading Fees: Liquidity providers receive a portion of the trading fees generated by transactions on the platform. These fees are distributed proportionally to the amount of liquidity provided by each user.
Governance Tokens: Some protocols distribute governance tokens to liquidity providers as rewards. These tokens grant holders voting rights and decision-making power within the protocol.
Protocol Tokens: In addition to governance tokens, liquidity providers may also receive the protocol's native tokens as rewards. These tokens can have various utilities within the ecosystem and may provide additional incentives for participation.
