Liquidity Farm (Yield Farming)
At KnightSwap, our farms & trading fees are the incentive for users to provide liquidity for their favorite BNB Chain projects. The yield from farms are paid out in $KNIGHT, while trading fees are paid out in the LP provided.
As an investor, by providing liquidity for your favorite project, you will also help to reduce the volatility in price. This ensures a more consistent return on your investment in the long term.
By using our farms, users can stake their LP tokens after providing liquidity to earn $KNIGHT tokens on top of trading fees through our platform. These $KNIGHT tokens will always have buying power within our DEX and can be used to obtain more $KNIGHT tokens through the Knight Pool or our partner tokens through Raids.
Because of the nature of DeFi providing LP does not come without some risks. If you’re considering supplying liquidity to one of our liquidity pools in order to farm, it’s important to understand the effects of impermanent loss. For a great guide on impermanent loss, check out this article from Binance Academy or this video from the Wolf Den.