DeFi Yield Farming Part 1 — Money in your sleep

Warren Buffet’s quote

Lucky for you, this article is precisely about explaining how DeFi helps you make money in your sleep, so that rent payments don’t take up 50% of your total income each month. If you haven’t already read my previous article, make sure to go do that! This article will delve into the “how” farming works, but if you want a step by step tutorial (complete with pictures!) on how to get started farming on Apeswap, come back here after reading through:

Apeswap — Magic internet money?

Liquidity Provider (LP) tokens

First, we need to discuss what an Automated Market Maker (AMM) like Apeswap does. In the stock markets today, in order for you to sell 1 stock of Microsoft at $20, you’d have to wait around till there was someone willing to buy 1 stock of Microsoft for $20. Two things to note here:

1. This delay isn’t ideal since you might have needed that $20 desperately at that moment in time.
2. You’d pay a fee to the company

Delay