Yield Farming
Yield farming is the practice of moving your tokens between DeFi protocols to maximize returns — providing liquidity, lending, staking — often chasing the
Yield farming is the practice of moving your tokens between DeFi protocols to maximize returns — providing liquidity, lending, staking — often chasing the protocol’s freshly minted governance-token rewards on top of trading fees.
Why it matters
Farming created DeFi’s boom ‘*and* its danger: yields of thousands of percent were real, but they were usually paid in tokens that were themselves speculative. In healthy form it’s “earning for providing a real service”; in hype form it’s a liquidity extraction machine with impermanent-loss and hack risk attached.