The majority of ApeSwap Yield Farms are BANANA Farms. These Yield Farms allow users to stake the liquidity provider tokens to earn BANANA rewards.
Like any other decentralized exchange, ApeSwap needs liquidity to operate. Incentivizing this liquidity with reward tokens (in this case, BANANA) ensures that users continue to add liquidity into the platform to facilitate trading.
ApeSwap constantly monitors the liquidity available on the DEX to ensure that Yield Farms are incentivizing healthy levels of liquidity for particular tokens pairs. In practice, these incentives are managed through biweekly changes to the multipliers applied to each farm.
Farm multipliers are used to manage BANANA emissions distributed to Yield Farms on a per-block basis. Adjusting the multiplier for each Yield Farm changes the amount of BANANA rewards paid out to users who stake in that Yield Farm, relative to other ApeSwap Yield Farms.
For example: Assuming all other factors like pool size, number of participants, and token price remained the same, a Yield Farm with a 2x multiplier would pay more in BANANA rewards than one with a 1x multiplier.
NOTE: LP tokens that are staked in Yield Farms still earn their portion of the applicable trading fees, even while they are also earning BANANA in the Yield Farm. This allows users to earn both trading fee rewards (paid in the form additional LP tokens) and BANANA (paid as Yield Farm rewards) on their LP tokens.
To contribute to the longevity of the ApeSwap ecosystem and earn even more rewards, users can stake the BANANA earned from Yield Farms into the BANANA-BANANA Staking Pool to earn even more BANANA.
Continue to the How To Yield Farm page to learn how to stake LP tokens to earn BANANA.