Yield farming is the lending or staking of a cryptocurrency or pair of cryptocurrencies in exchange for interest (yield). Users loan their capital by placing it into a pool of liquidity and are rewarded with interest payments. Most often these interest payments come in the form of the native token for that project. Yield Farming is most popular on decentralized exchanges to organically increase the liquidity pool size, allowing for larger asset exchanges to occur on the platform with less slippage. Some yield farms boast incredibly high returns (some as high as 40,000% per year after compounding), but with such high returns comes attached risk, and users should tread carefully.