1) WHAT'S FARMING GUIDE (I'm not an expert. I'm just a simple Farmer Joe who DYOR)

You have cryptocurrency. You consider it an investment vehicle so you bought it and locked it away in a hardware wallet ( @Trezor @Ledger) because that's how you keep it safe from the bad men.

2) Farming however let's you put your unused tokens to work and it doesn't even leave the sanctuary of your hardware wallet.

Let's start with farming in an AMM (Automated Market Maker). This is going to take some explaining before I even get to farming again.

3) Back at the beginning we had a CEX, a centralized exchange. They had order books. Someone put up a price they wanted to buy/sell at and someone came along & bought/sold to it. So u had market makers & takers. If you wanted to partake on this, you deposited money into the CEX.

4) The next evolution were DEXes, decentralized exchanges with similar order books. These DEXes had one huge improvement: you don't have to deposit your crypto. The trades are all done safely from your hardware wallet. Your keys your coins!

5) You feel safe, but these DEXes had one flaw. Because CEXes were first movers, they had all the volume and liquidity thus all the orders. If you wanted to buy a lot of any token you would be paying a premium on spread and slippage.

6) Next comes AMM DEXes. Automated Market Makers. Now you don't have order books. You don't have users being market makers. Instead you had liquidity pools made of pairings. For example an ETH-USDT pool.

7) Users didn't deposit into the exchange like at a CEX. They deposit into the pools, which the DEX would use as liquidity. For example users would deposit equal parts $ETH and $USDT into the ETH/USDT pools.

8) Why would you want to let the DEX use your tokens to help with their liquidity? Incentivization! Place your tokens -- collecting dust anyway -- in these pools and the DEX would give u a portion of the trading fees. (All the while never leaving your hardware wallet).

9) A popular example of this is @UniswapProtocol, which took inspiration from @Bancor (You can provide liquidity on either right now and earn those fees!)

10) However be careful of impermanent loss, which can destroy your profits and even put you in the red compared if you had just held both tokens in your wallet! Will explain about that in a different thread)

11) All pretty cool though. Imagine owning $TESLA and $FB stock and being able to earn passive fees on them whenever a trade happen.

12) Now DEXes weren't so illiquid, bc people were providing liquidity bc they were incentivized to. Okay all this and we haven't started farming yet. We're almost there. I promise.

13) So we had CEXes. Then DEXes. Then AMM DEXes. The next evolution came AMM DEXes that gave you a secondary incentive: their governance token.

14) Whoah, two incentives! No wonder these next things really took off, but now we gotta talk about governance tokens before we move any further. This thread may never end.

15) So on the road to true decentralization, governance tokens represent having a say in the direction of the protocol. And the more tokens you have the more sway you have through voting power.

16) U could vote on things like changing swap fees to how many gov tokens will be issued to even who gets a bigger share. These tokens have no inherent value, but u can see that as a protocol starts making more earnings, having the ability to vote in ur self interest holds value.

17) So these protocols would mint governance tokens out of thin air and the market would eventually decide their value. But bc they have value in this sense they gave people even MORE reason to provide liquidity. Enough reason to leave a place like Uniswap & move to Balancer.

18) Summary of this new AMM DEX: Put ur tokens in the liquidity pool on that AMM DEX and now not only are you getting money from trading fees, but you get a percentage of the protocol's governance token, which has value if you want to sell it or value if you want to vote with it

19) Examples: @CurveFinance, @BalancerLabs , @mooniswap, Dodoex

So this is one of the ways you can "Farm." You can plant your tokens in an AMM DEX, earn fees and FARM their governance tokens.

20) It doesn't last forever. It can be as short as a few weeks to as long as years. There is an end date to when the governance tokens are issued. But by then, this newly formed DEX bootstrapped liquidity and a community and doesn't need any more bribery to sustain its business.

FARMING - people plant there tokens at places -- one example is an AMM DEX -- to farm tokens that had no inherent value, but the tokens usually gain monetary and speculative value.

21) So these AMM DEXes would all have their own quirks to make u want to believe that it has the best DEX with its own specialty & convince you to leave 1 DEXs liquidity ecosystem & join theirs & earn its governess token. Total liquidity is limited & they all were fighting for it