Yield farming is a newer concept than crypto staking, and it refers to the ability of one investor to carefully plan and choose what tokens to lend and on which platform. Cryptocurrency holders have the option to lend their funds, using liquidity pools, and receive a reward for their effort. Liquidity providers (LPs) deposit funds to the liquidity pool to sustain the system, and they earn a reward for it. Because of the liquidity providers who offer their funds to certain liquidity pools, other users are able to lend, borrow, and trade crypto. All crypto transactions have a service fee, which is distributed among the LPs. Besides that, all lending protocols have a native token distributed to the LPs to further incentivize liquidity pool funding. Yield Farming is a means of earning interest on your crypto, similar to how you'd earn interest on any money in your traditional savings bank account. Yield Farming operates in the same manner as bank loans do. When you borrow money from a bank, you must repay it with interest. Yield Farming works in the same way, except this time the banks are cryptocurrency holders like you.