With ApeSwap Yield Farms, users can stake liquidity provider (LP) tokens to boost earning power through native BANANA token rewards.
How Yield Farms Work
ApeSwap Yield Farms are designed to primarily incentivize users to provide liquidity for their favorite DeFi projects. Users who create and stake their liquidity provider tokens in a Yield Farm will earn BANANA utility tokens.
As a DeFi platform, liquidity is crucial to a healthy ecosystem. More liquidity available to ApeSwap means more users can trade hundreds of their favorite tokens at low fees. Therefore, it’s in everyone's best interest to encourage liquidity for popular trading pairs on ApeSwap, because popular trading pairs require more liquidity and generate more trading fee revenue.
For more info on liquidity provider (LP) tokens and how to create them, visit the Liquidity section.
Along with Staking Pools, Yield Farms allow users the ability to generate passive income over an extended period of time. Yield farming is a way to put your APE-LP tokens to work, actively earning BANANA rewards on top of the trading fees that you collect as an APE-LP holder.
Instead of staking a single protocol token like BANANA or GNANA to earn rewards, users stake a combined Liquidity Pool token (APE-LP tokens on ApeSwap) to earn BANANA. Creating a Liquidity Pool token requires users to stake equal amounts of two tokens together (For example: BANANA and BNB) in one transaction, and then deposited into the Yield Farm smart contract to earn rewards.
On the Yield Farms page, instead of seeing farms expressed as "Stake [Token], Earn [Token]", you'll see "Stake [token pair], Earn [Token]". All BANANA farms earn BANANA as the reward token, whereas Jungle Farms earn partner tokens.
For example: the BANANA-BUSD farm allows users to stake APE-LP tokens they've earned from adding liquidity to the BANANA-BUSD liquidity pool to earn BANANA reward tokens.
An example of a Yield Farm, using BANANA-BUSD Liquidity Pool tokens.
Polygon Yield Farms
Yield Farms on Polygon work slightly differently than those on BNB Chain. Instead of providing BANANA as the single reward token, some Polygon Yield Farms are dual reward farms. For those farms if you stake Polygon APE-LP tokens into a Polygon Yield Farm, you'll receive both BANANA reward tokens and a second reward token. This second reward token is typically a partner project token, depending on the farm.
An example of a dual-rewards Yield Farm, where NFTY-MATIC Liquidity Pool tokens are staked to earn both BANANA and NFTY tokens.
As with Staking Pools, Yield Farm returns are expressed in APR and is listed next to each farm. This is the expected amount of BANANA tokens that will accrue while your Liquidity Pool tokens are staked, expressed as a percentage of the amount of staked input tokens and calculated at current rates. This APR is next to the BANANA icon. Each farm also shows the trading fee APR you receive as a result of holding the LP token itself. This APR is next to the swap icon.
Yield Farms also show the APY that assumes daily compounding of your rewards back into the farm. Due to the effects of compounding, this APY will likely be higher than the listed APR for each farm.
Like Staking Pools, APRs and APYs are displayed to help users understand their potential return on staking and are not guaranteed. The actual rate of return is subject to several different factors, and your rewards may vary over time.
At any point, you can harvest reward tokens out of a Yield Farm and back into your wallet. To withdraw rewards, select the Yield Farm you want to withdraw from and press the "Harvest" button.
Withdrawing Liquidity Provider Tokens
Users also retain the right to remove liquidity provider (LP) tokens from a Yield Farm. To withdraw tokens, click on the "Minus" (-) button next to the Staked LP display. To further breakup those LP tokens into their individual tokens, visit the "Liquidity" section of our DEX to separate the tokens.
Yield Farm APR Cheat Sheet
Yield Farm APRs are determined by three primary factors: the price of the input LP token, the price of the reward token (i.e., BANANA), and the amount of input LP tokens in the pool. Let's look at how changes to these three factors affect the APR of a Yield Farm.
If the price of the input LP token increases, the APR will decrease, because each input LP token is worth relatively fewer reward tokens.
If the price of the input token decreases, the APR will increase, because each input LP token is worth relatively more reward tokens.
If the price of the reward token (BANANA) increases, the APR will increase, because the total value of the reward tokens received for the same number of input LP tokens has increased.
If the price of the reward token (BANANA) decreases, the APR will decrease, because the total value of the reward tokens received for the same number of input LP tokens has decreased.
If the number of input LP tokens staked in a Yield Farm increases, the APR will decrease, because the same amount of reward tokens are distributed against more input LP tokens.
If the number of input LP tokens staked in a Yield Farm decreases, the APR will increase, because the same amount of reward tokens are distributed against fewer input LP tokens.