COMP token (the Compound Finance network’s governance token) may be responsible for an unexpected strong awareness of yield farming.
Token holders are granted governance rights via governance tokens. But, in order to decentralize the network as much as possible, these tokens must be distributed systematically.
One popular way of doing this is to have these governance tokens distributed algorithmically, with incentives in liquidity. This will in turn draw LPs to “farm” the token by funding the protocol liquidity.
Although the launch of COMP did not give rise to yield farming, it did popularize this model for the distribution of tokens. Ever since, other DeFi platforms have developed innovative ways to draw liquidity to their network.
