In decentralized finance (DeFi), winding up essentially means wrapping crypto tokens through various projects in order to find the best yield.
What Is Winding Up?
In decentralized finance (DeFi), winding up essentially means wrapping crypto tokens through various projects in order to find the best yield. Wrapped tokens are those which natively live on another blockchain, such as Ethereum, and bring interoperability throughout the DeFi space. The introduction of wrapped tokens initially started with Ethereum and its ERC-20 token standard. Today, there are many more, for example, wrapped Bitcoin (wBTC), which began with Bitcoin and is now used in countless DeFi applications on Ethereum.
For crypto holders to get the best yield for their tokens, they need to go through a number of oftentimes complex steps.
For instance, if a crypto holder starts with wBTC and wants to get Interest-Bearing BTC (ibBTC), then they will need to deposit it first on Curve Finance. From there, the user will receive an LP token which they can take to Badger DAO and mint the desired ibBTC.Similarly, if a user starts with USDC and wants to get $SNOW, then they first need to deposit that USDC on Harvest Finance, an automated yield farming protocol. From there, Harvest Finance will return fUSDC as proof of deposit. Lastly, the user deposits their fUSDC to Snowswap in exchange for $fSNOW.
This is what, in essence, winding up means.
Author: Harvest Collective.
Harvest Finance is a cooperative yield farming protocol on the cutting edge of decentralized finance. Harvest automatically farms the highest yields available by relentlessly developing new farming strategies, and pools deposits to lower gas costs for individual users.