# What is farming

Crypto yield farming is the process of lending cryptocurrencies to exchange in return for high fees, otherwise referred to as yield. You put your digital assets to work through liquidity mining in a liquidity pool. \
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This yield will typically be paid out in crypto. However, it requires a liquidity pool as well as a liquidity provider. It is a part of decentralized finance (DeFi) due to the various benefits it provides to the exchange, and this is the main reason it has received such a high level of popularity.



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APR is short for the annual percentage rate. Investors get the amount of interest as a reward by making their NEXUS tokens available for loans, considering the interest rate and any other fees that borrowers have to pay. This APR ignores the compounding impact.

For you to be able to calculate APR, you have to:

* Add up all of the fees and interest rates to be paid for the loan.
* Divide the total fees and interest by the principal.
* Divide the result by the total period of the loan in years.
* Multiply the result by 100.

{% hint style="info" %}
This will look something like: APR = \[(Fees + Interest)/Principal] x (Number of Years) x 100.&#x20;
{% endhint %}

The calculation will change across different DeFI protocols regarding DeFi yield farming of farming such as Nexus Yield farming through the utilization of Nexus token. They will impact the annual percentage rate and have a different risk-reward ratio.
