Yield farming vs Staking | Bitcointalksearch.org

Abiky

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Quote from: asawale on July 08, 2023, 06:51:58 PM

Base on my understanding, staking is mostly locking your token or coin through a contract address to earn interest. Yield farming on the other comes with first adding liquidity on a smart contract and then stake the liquidity pool for additional reward. Earning that one gets from yield farming is quite more than than of staking.

If we're talking about current staking models, then you're correct. But old-fashioned staking works in a completely different way. You just run the wallet software yourself and leave it running 24/7 to earn coins along the way. That is assuming you have a minimum number of coins required for staking. This approach is much more decentralized than "lending" your coins to a validator or staker to earn rewards.

Most modern PoS coins have this model (lending), adding more risk to your investment than necessary. Yield farming, is a much better option because you'd only need to trust a smart contract. You usually lend your stablecoins to a "De-Fi" platform such as Aave or Compound.Finance to earn money over time. There's no risk involved if the platform itself has been audited and tested before launch. Ultimately, you'd need to leverage both methods advantages/disadvantages to get what you want. As long as you don't invest more than what you can't afford to lose, there should be nothing to worry about. Just my thoughts Grin

asawale

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Base on my understanding, staking is mostly locking your token or coin through a contract address to earn interest. Yield farming on the other comes with first adding liquidity on a smart contract and then stake the liquidity pool for additional reward. Earning that one gets from yield farming is quite more than than of staking.

nelson4lov

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Quote from: Blitzboy on July 05, 2023, 03:58:41 AM

Yield farming with stablecoins - or any token - may not be as dangerous as some claim. Many DeFi platforms feature strong security. While mistrust is warranted, would it be wise to miss out on prospective advantages owing to an overblown fear of loss?

There's no zero risk yield farming available in the DeFi space. Even the popular liquidity mining and Liquidity programs offered by DeFi projects have more implications than the strong security of the platforms in question. It's true that there's been plenty of hacks in the past but most project have started taking security seriously which has led to the rise of smart contracts audit but then, the yield farming part, there's still no viable solution that would allow users to earn yields as advertised.

IIRC, there's a report recently that shows that most LP providers usually end up in net-negative due to continously decline of the underlying protocol token value.

Blitzboy

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Quote from: electronicash on June 30, 2023, 06:45:02 AM

when your tokens leave your wallet, it definitely is not yours anymore and this is required when you are yield farming and staking. something that we always want to avoid so the saying goes "not your keys, not your coins". yielding using the stablecoin has been scary since the time of luna.

but we are still interested to send out coins though all for the money we can make when apy is attractive.

You make a crucial point that cuts to the heart of one of crypto's biggest problems. Its like being trapped. APYs are tempting, but you risk losing token control. Financial markets face this dilemma regularly. Banks and financial corporations are trusted to double our money. Yield farming offers great returns at significant risk. Purists prefer control over yield, thus "not your keys, not your coins" makes sense.

Yield farming with stablecoins - or any token - may not be as dangerous as some claim. Many DeFi platforms feature strong security. While mistrust is warranted, would it be wise to miss out on prospective advantages owing to an overblown fear of loss?

Xal0lex

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Quote from: Abiky on July 03, 2023, 09:10:42 PM

Quote from: Xal0lex on June 30, 2023, 02:15:53 PM

In my opinion, staking is more reliable when it comes to staking known coins. Yield farming is often accompanied by earning new tokens by delegating your valuable tokens, such as ETH. Whether those new tokens that are given to you as rewards will have any value is a big question, plus those tokens are often hard to sell due to lack of liquidity or they have high slippage. I would choose staking.

Staking is always better. But you could lose your investment overnight due to volatile market prices. It's like Yield Farming where you "lend" stablecoins to a "De-Fi" protocol. These coins usually maintain their 1:1 peg to the USD, so there's a minimal chance you'll lose it all in an instant.

Stakers who bought the asset for staking at current market prices, when the coin itself had already managed to grow many times, are most often exposed to such a risk.

Quote from: Abiky on July 03, 2023, 09:10:42 PM

Nothing is perfect, so I'd just do both of them (yield farming and staking) to keep the passive income flowing. This is still better than saving money at a bank. As long as decentralization is preserved, people will be able to earn from either staking or yield farming without restrictions. Who knows if "De-Fi" will replace "Ce-Fi" in the future? Cheesy

To be honest, I wouldn't do any of those things. Unless you have cheap tokens available, which you need for steaking or for the yield farming Wink

crwth

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From what I understand, Yield Farming is for those that involves liquidity pools being used to maintain liquidity of a certain coin or the DeFi ecosystem and then reward with newly minted tokens. For staking, it invovles locking up your asset to support the network by security and validating transactions then be rewarded. The bottomline here is that you could earn passive income in both, you just need to choose one.

mdzahed134

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Staking and Yield Farming both have a bit similarity i think. Though i have experienced in both of these, some advantages and disadvantages here, as like staking it’s duration will be 30 days and 90 days, your coins will be locked but i would like to recommend staking over farming. If you will stake top coins those are looks stable coins i think you will get good return.

bettercrypto

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Quote from: Abiky on June 29, 2023, 12:43:18 PM

I've came across "yield farming" which looks quite similar to staking. You basically go on a "hunt" for "De-Fi" platforms which offer the best rates for your stablecoin (or token) holdings. This is done in a non-custodial manner through the use of smart contracts. On staking, I can basically "delegate" my coins to a validator and earn daily income.

What I want to know is if "yield farming" is better than staking. An overview of the advantages/disadvantages between the two would be nice. Any clarifications would be greatly appreciated. Thanks in advance.

Even I thought at first that yield farming and staking were the same thing, but I misunderstood. I found yield farming to be better than staking based on what I saw and observed here.

And did you know that yield farming is higher in terms of when it comes to flexibility, providing opportunity and potential return, yield farming is the only one here that through biswap which I tried several times 4 years ago if I am not mistaken.

Abiky

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Quote from: Xal0lex on June 30, 2023, 02:15:53 PM

In my opinion, staking is more reliable when it comes to staking known coins. Yield farming is often accompanied by earning new tokens by delegating your valuable tokens, such as ETH. Whether those new tokens that are given to you as rewards will have any value is a big question, plus those tokens are often hard to sell due to lack of liquidity or they have high slippage. I would choose staking.

Staking is always better. But you could lose your investment overnight due to volatile market prices. It's like Yield Farming where you "lend" stablecoins to a "De-Fi" protocol. These coins usually maintain their 1:1 peg to the USD, so there's a minimal chance you'll lose it all in an instant.

Nothing is perfect, so I'd just do both of them (yield farming and staking) to keep the passive income flowing. This is still better than saving money at a bank. As long as decentralization is preserved, people will be able to earn from either staking or yield farming without restrictions. Who knows if "De-Fi" will replace "Ce-Fi" in the future? Cheesy

Jocuserious

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For new coin i wont believe anything else even just buy and sold. If you asked me for old altcoins then i can said that both are good profits for holders. Personally staking system was good at least lot of people involved of this items. Still now i have been participate 3-4 project which is comfortable for profits.

Husires

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Quote from: terencio on June 30, 2023, 12:47:02 PM

Staking involves locking your coins in a validator node that secures a proof-of-stake network, but also requires you to follow the network rules, stake for a minimum period, and accept lower returns. The best option depends on your risk appetite, time horizon, and coin preference.

Not necessarily, in the Cardano cryptocurrency all you had to do was not to spend from your wallet address where you have full access to your coin and you can at any moment send coins from your wallet, so if crypto is based on true proof of stake, you may not need to lock your coins while you need it in Yield farming.
In short, staking provides more dynamic and security for your currencies than yield farming.

Rampagoe004

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I used to do yield farming and staking. Both are good things in my opinion. But I prefer staking because I am a long term investor. But I've also made very good APY from Yield farming. And Yield farming is also more flexible than staking because you are free to determine when you will take your assets back.

sheenshane

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My choice would be Staking which is a lower risk that yields farming.
As we can always see, the potential of high return would be also associated with a high risk and IMO, that's how yield farming does which is very risky not like staking the risk is how to entrust a platform to stake your coin in a long period of time. Because the duration of the lock-up period and the potential rewards can vary depending on the specific blockchain network and its staking mechanism.

But if you're going to ask me personally, I'll not choose any of them.

Bolivar_Tony

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Yield farming and staking are both popular methods to earn passive income in the crypto space. Yield farming involves actively seeking the best returns by moving funds across various DeFi platforms, while staking typically involves delegating coins to validators for more stable returns. The choice between the two depends on personal preference, risk tolerance, and willingness to actively manage investments.

Hypnosis00

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Quote from: Abiky on June 29, 2023, 12:43:18 PM

I've came across "yield farming" which looks quite similar to staking. You basically go on a "hunt" for "De-Fi" platforms which offer the best rates for your stablecoin (or token) holdings. This is done in a non-custodial manner through the use of smart contracts. On staking, I can basically "delegate" my coins to a validator and earn daily income.

What I want to know is if "yield farming" is better than staking. An overview of the advantages/disadvantages between the two would be nice. Any clarifications would be greatly appreciated. Thanks in advance.

Well, I'd never tried yield farming so can't say it was more profitable or not compared to staking. But then, I would say that I wasn't really a fan of doing this after having an unsatisfying experience with staking and this yield farming is just the same results (probably). Developers will try to create another term for staking just to divert the views and insights of those who have experienced this. And the only advantage that we get is earning a few bucks but the risk is too high.

cute nmp

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Yield farming involves providing liquidity to DeFi protocols and earning rewards, while staking involves holding and locking up cryptocurrencies to secure a network and earn rewards. Yield farming carries higher risks due to the dynamic nature of DeFi, while staking is generally considered more stable. The choice between the two depends on factors such as risk tolerance and desired returns.

SyndicateLabs

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I don't make too much of a distinction between these forms in the field of Defi, actually there are risks and benefits between them, so I think I would prefer trusting platforms to get less risk. Some of the big names in the defi space have made waves, but in terms of hype leading to many low quality products, even though I don't have much experience with them, I have staking some of them. The amount of crypto is indeed in addition to the benefits that I received, I remember accidentally being in the category of receiving airdrops.

Apocollapse

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Yield farming, staking, interest account, invest in casino bankroll, etc are same, it's about locking or transferring your coins to centralized pool/smart contract/project.

Of course each user has his own preference to judge which method is more profitable and which one is not, but it's better to hold the coins in safe non custodial wallet in order to prevent of losing all of coins we have make. Don't too greedy in cryptocurrency because everyone e.g. including the team of centralized project also want to make money.

Blitzboy

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Quote from: Abiky on June 30, 2023, 01:31:37 PM

Quote from: o48o on June 29, 2023, 05:47:03 PM

Better how? They are build for completely different reasons, other one is keeping chain secure and other is being a liquidity provider. I don't think they are comparable in any other form than their APY

With staking your money is relatively safe, and while yield farming might give you way more APY, but at the same time your money is far from safe as there's a risk of impermanent loss. Not to mention possible DeFi protocol code vulnerabilities.

Based on what you've said, I think yield farming is a lot riskier than staking. That's because smart contracts are usually untested with a lot of vulnerabilities on them. I've seen many cases where hackers siphoned millions of dollars (USD) worth of crypto from a "De-Fi" platform. You don't hear that with native PoS coins.

While this is a fact, I'd have to admit that staking is becoming more centralized by the day. There are so many coins on the market that are controlled by a few players with a lot of money (mainly exchanges). ETH, and BNB are a good example of this. With yield farming, everything is done in a "non-custodial" manner. You'd have to verify and trust the smart contract yourself. Doing both (Yield Farming and Staking) will allow you to minimize risks of loss in the long run. And that's precisely what I'm going to do. Wish me luck! Cheesy

There is merit in your observation that yield farming is fraught with risks, especially those emerging from the untested nature of smart contracts. The recent heists from DeFi platforms have indeed been alarming.

The issue of centralization in staking is indeed a growing concern. But consider this - is it the nature of the consensus mechanism, or is it reflective of the larger socio-economic inequalities? Perhaps its a systemic issue that transcends the technology.

Your preference for a non-custodial setup in yield farming, though appealing, comes with its own set of challenges. It demands a certain level of sophistication from the users which can be a high entry barrier for many. The strategy of diversifying between yield farming and staking appears prudent, yet the intrigue lies in the precise balance you strike.

Myleschetty

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Staking is a kid giving birth to by Yield farming. Yield farming, also known as liquidity mining, is a revenue generation approach pioneered by the DeFi project in which users can earn incentives by lending, staking, or supplying liquidity to decentralized protocols or platforms.
Both Yield farming and staking share the same disadvantage from my understanding one of the disadvantages is lock time span, Smart contract vulnerabilities

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