Yield Farming
Moving your crypto between different apps to earn the best rewards. Like shopping around for the best savings account interest rate.
Example
Putting stablecoins in Curve Finance to earn trading fees, bonus tokens, and extra rewards from other programs.
Related Terms
Core Concepts
⚙️How It Works
- 1
Find Opportunity
Research protocols offering rewards (trading fees, token incentives, points)
- 2
Deposit Assets
Provide liquidity, stake tokens, or lend crypto to the protocol
- 3
Earn Rewards
Accumulate yield from fees, token emissions, or bonus programs
- 4
Harvest & Compound
Claim rewards and reinvest for compounding returns
- 5
Monitor & Rotate
Watch for better opportunities and rebalance as needed
📊Key Numbers
2-8%
Stablecoin Yields
typical conservative APY
20-100%+
Incentivized Pools
with token rewards
Higher APY = Higher Risk
Risk Correlation
general rule
⚠️Risks & Warnings
- •Smart contract risk - bugs could drain your deposited funds
- •Impermanent loss - price changes may reduce your holdings
- •Token rewards may dump in value before you can sell
- •High gas fees can eat into profits on small positions
- •Rug pulls and scams are common in new/unaudited protocols
🚀Getting Started
- 1Start with established protocols (Aave, Compound, Curve, Convex)
- 2Begin with stablecoin strategies to minimize volatility risk
- 3Use yield aggregators (Yearn, Beefy) to auto-compound rewards
- 4Calculate true returns after gas fees and potential IL
- 5Never chase the highest APY - it usually indicates high risk