Yield farming is the practice of lending a cryptocurrency to another party for interest.
The farmer can also earn by accepting liquidity from another party and lending it on a liquidity pool.
The farmer who provides the liquidity to the market can receive Liquidity Provider Tokens that he/she can sell on decentralized exchanges at an appreciating rate.
A farm is a token like any other cryptocurrency and its value either appreciates or depreciates relative to other cryptocurrencies like Bitcoin, Ethereum, etc.

If you are the farmer you are responsible for maintaining the liquidity of the particular pair in which you have decided to provide liquidity.
 The most important factor that decides your yield is determining how much incentive you stand to get when joining a pool and how much risk you’re willing to take to get that incentive.

Yield farming is risky because many projects are not very reliable and there is no guarantee that the project will succeed and yield rewards. Some projects even fail shortly after launch leaving investors with nothing but losses.

Conclusively, yield farming has the potential to be profitable but it comes with high risk due risks associated with cryptocurrencies in general