Tag: What is yield farming vs staking?

In yield farming, you lend your money to a trading platform with automated market-making (AMM) system . Some decentralized trading platforms (DEX) rely on their liquidity being crowd-sourced like this.6 Oca 2022

Yield Farming is a more recent concept than staking, yet sharing a lot of similarities. While yield farming supplies liquidity to a DeFi protocol in exchange for yield, staking can refer to actions like locking up 32 ETH to become a validator node on the Ethereum 2.0 network .

Despite the lack of an immediate payout, yield farming has the potential to be fairly lucrative over the long term . Why? Because without a lockup, you can try to jump between platforms and tokens to find the best yield. You just need to trust the network and DApp you’re using.