> For the complete documentation index, see [llms.txt](https://financekyrios.gitbook.io/kyrios-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://financekyrios.gitbook.io/kyrios-finance/knowledge/whats-farming.md).
# What's Farming?
{% hint style="warning" %}
Please make sure you understand farming before taking part in the project
{% endhint %}
Yield farming is the practice of staking or lending crypto assets in order to generate high returns or rewards in the form of additional cryptocurrency, so if you provide liquidity to the project using certain assets like stable coins or other kinds of coins you'll receive the project's Token in return.
**Does this mean that I'll lose my funds? Absolutely not you're only lending the assets.**
Yield farming protocols incentivize liquidity providers (LP) to stake or lock up their crypto assets in a smart contract-based liquidity pool. These incentives can be a percentage of transaction fees, interest from lenders, or a governance token.
These returns are expressed as an annual percentage yield (APY). As more investors add funds to the related liquidity pool, the value of the issued returns decrease accordingly. At first, most yield farmers staked well-known stablecoins USDT, DAI, and USDC. However, the most popular DeFi protocols now operate on the Ethereum network and offer governance tokens for so-called liquidity mining.
Liquidity mining occurs when a yield farming participant earns token rewards as additional compensation. Most yield farming protocols now reward liquidity providers with governance tokens, which can usually be traded on both centralized and decentralized exchanges.
**So in a nutshell, you will provide liquidity into a pool and earn rewards in the governance token.**
{% hint style="success" %}
It's highly recommended to research before investing, your assets are your responsibility and you must assume the risk involved in trading them.
{% endhint %}