Yield farming
MarketsDefinition
Strategy of moving crypto capital across DeFi protocols to maximize composite yield. Combines staking rewards, lending interest, governance token incentives, leverage. Heyday: 2020-2021 with 100%+ APYs not uncommon.
Risks: smart-contract exploits, governance attacks, token-issuance dilution that erases the headline APY. Sophisticated farmers use position management tools (Yearn, Convex) to compound automatically.
Risks: smart-contract exploits, governance attacks, token-issuance dilution that erases the headline APY. Sophisticated farmers use position management tools (Yearn, Convex) to compound automatically.