Topic: Yield farming vs Staking - page 2. (Read 379 times)

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.

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!

I will choice staking programme with top coins. Because for invest in top altcoins low risk so we can stake long time there. I wasn’t using yield farming but i have use stake in many project. I think both of them way for earn money from crypto so you can choice anywhere as your like.

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.

According to its profit, yield farming far exceeds the income received from staking and in some cases exceeds 1000% per annum. But it is necessary to remember about the risks that are associated with volatility and are called non-permanent losses. In this case, the deposit amount at the time of withdrawal will be less than the amount deposited.

Yield Farming is another Form of Staking because you can farm yield by Staking on Liquidity etc. They are the same with just multiple number of other use case. Staking is now the term use on DeFi for farming and not only from it’s original use of delegation. Staking on DeFi is now more frequent to use rather than staking on blockchain for validation.

Yield farming on your context includes a lot of risk but also produce high yield while Staking is safe if you stake on trusted validator but slow return. I will go for DeFi staking if you will do this in short term investment.

Yield farming sounds like ponzi for me. The reward generated from allocating some tokens as reward for its famers. The problem is yield farming is offering non sense reward unlike staking which has been offering sense reward.

The problem is how sustain yield farming compared with staking. I will prefer to go to staking instead of yield farming.

They are only similar to each other but obviously not the same thing, if you're staking, then you're taking a particular leverage position with the corporation or project you're dealing with and have right to handle a particular portion of bond in your own capacity assigned to you base on your stake amount or contributions, yield farming is like you investing on a particular project that you perform some particular daily task to be rewarded with some incentives in any currency form.

Both of them earn you passively but in yield farming, there's the reason why you're putting your asset into a platform and just like the banks, they're using it for some other usage like lending or using it with their investments. While in staking, you're helping the network of that token of yours. It's true that in yielding, there's more risk than of staking so if it's all about profitability, you'll never know as both of them changes dramatically overtime depending on the situation of their own networks and projects.

• A way to keep it simple is by saying that Yield farming involves providing LP contract (any token x usdt/bnb/eth etc) then in turn earn rewards daily depending on the allocated APY rewards. Also, You can join yield farming at any top decentralized exchanges such as pancakeswap, uniswap etc; or join yield farming at any tokens that offers such on their platform.

Yield farming disadvantage would be irreparable loss, double loss (because you provide a pair of 2 tokens in an LP)
Yield farming advantage would be high earning rate from the pool, the bigger your LP, The bigger the earnings daily.

• Staking is also good, all you have to do is deposit the tokens into a staking pool and you can earn proceeds regularly from the staking pool depending on the APY of the staking pool contract; the bigger the tokens you stake, the bigger % you earn daily.

Staking advantage would be that, if things turn south; your loss would only be "that token staked", compared to Yield farming where you lose the tokens and your stables. Also with staking, you can increase your total holdings if you plan to hold long term.
Staking disadvantage meanwhile is that you could miss the opportunity to sell your tokens at a good price; if pump takes place when you are locked in staking

Actually I see both of these forms in the defi environment have their positives and negatives, so comparing which is better than the other doesn't seem to me too much of an opinion. It seems that the few that have maintained sustainability, the rest are all short-term things and come with trends in this market to hit the psychology of knowledge diversity along with the theory of technology or utility, for me, I also tried some products but honestly I don't spend too much time on these forms.

Let's say that in some way they are equivalent you just need to look for the highest odds, staking and lending are usually offered, proposed by the cex, the yeld and offering liquidity are on the dex / defi

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. 

Better in terms of what? You are just asking like does car is better than a motorcycle, without defining the specific aspect to compare. Both things might get you from point A to B, but which one is faster or safer is a consideration that you miss.

Technically, yield farming and staking is not pretty similar. Nevertheless, if we strictly speak about the reward without thinking about what it actually does, in terms of risk factors, yield farming has more risk exposure compared to staking. Thus it makes the notion about the riskier thing that you do, the more reward potential, applies to both of these things.

Yield farming is so 2020 or 2021. Back then you had these projects claiming 1% per day of profits. You would own the token, which yield 1% but overall lost 50% of its value in a month. You were paid in the token not in fiat so it was an overall loss.

Then you had that IL when some whale would dump a huge amount of tokens which exceeded the pools capacity and you would be at a loss.

Staking more or less died in 2022 when all those lending platforms went belly up. Now people just yield with their savings account in the US.

The main difference is that in yield farming, the money must leave your wallet, whether by sending it to a third party or closing it in a smart contract, where this money is used as a loan and this loan gives a return, while in staking the coins may not leave your wallet as keeping the coins at an address enables you to be validator and get the transaction fee or variable return according to the network completely in Cardano.

Yield farming is very risky because it is a loan and there are no guarantees of getting your money back,  you are taking risks in return for promises of achieving a return. These promises may not be fulfilled while staking is less risky but less return, and the higher the return from the currency, the lower in USD.

Yield farming can be hacked or bankruptcy while in staking token value can go down.

Both strategies offer opportunities to earn passive income in the crypto space, but there are some important distinctions to consider. Let's dive into it!

Yield farming involves seeking out decentralized finance (DeFi) platforms that offer attractive rates of return for your stablecoin or token holdings. It often requires actively moving your funds across various platforms to maximize returns. The process is facilitated through smart contracts, allowing you to earn additional tokens as rewards for providing liquidity or participating in specific DeFi protocols.

On the other hand, staking involves delegating your coins to a validator on a blockchain network. By doing so, you contribute to the network's security and consensus mechanism, and in return, you earn regular rewards. Staking often requires locking up your funds for a specific period, during which they cannot be readily accessed.

Now, let's discuss the advantages and disadvantages of both strategies.

Advantages of yield farming:

1. Higher potential returns: Yield farming can offer significantly higher returns compared to traditional staking, especially during periods of high market activity.
2. Flexibility and diversification: You have the freedom to explore various DeFi platforms, seeking the best yields and diversifying your investments across different protocols.
3. Access to new tokens and projects: Yield farming can provide early access to new tokens and projects, potentially allowing you to participate in their growth from the early stages.

Disadvantages of yield farming:

1. Higher risk and complexity: Yield farming involves navigating multiple platforms, smart contracts, and protocols, which can be more complex and risky than traditional staking.
2. Volatility and impermanent loss: The value of the tokens you provide as liquidity can fluctuate, and there is a risk of impermanent loss if the value of the tokens changes significantly during your farming period.
3. Gas fees: Transaction fees on Ethereum or other blockchain networks can be high during times of congestion, affecting your overall profitability.

Advantages of staking:

1. Simplicity: Staking is often more straightforward than yield farming, as you delegate your coins and let the validator handle the technical aspects.
2. Lower risk: Staking typically carries lower risk compared to yield farming, as your funds are locked in a secure consensus mechanism and not subject to the same market volatility.

Disadvantages of staking:

1. Lower potential returns: Staking rewards are generally more stable but may offer lower returns compared to yield farming.
2. Limited flexibility: While staking, your funds are locked for a specific period, and you may not have immediate access to them if the need arises.

Ultimately, the choice between yield farming and staking depends on your risk appetite, technical understanding, and investment goals. If you're comfortable with the higher risks and complexities associated with yield farming and actively managing your investments, it may be worth exploring. On the other hand, if you prefer a more straightforward and stable approach, staking might be a better fit.

It's important to conduct thorough research, consider the risks involved, and stay updated on the latest developments in both yield farming and staking. This will help you make informed decisions aligned with your financial objectives.

the profitability in yield farming is indeed reliant on the token or project itself. there are so many combinations that you can select from this, but it is advisable to provide liquidity in a more familiar and popular market like the top bsc tokens like for example going into yield farming in pancake swap. you can already see the APY for each pair you will choose. staking is basically just earning rewards while holding your coins. yield farming depends also on how much percentage you have in the liquidity pool. if it is small, then don't expect that you will get a bigger share.

I think Yield Farming have to do with providing liquidity to a pool and then staking your LP token to get more of the platform token based on APY Yield-farming on new project might actually be profitable because mostly they offer high apy Just make sure you are following a good project to have enough of the coins to hold for some pump to come Staking is mostly an L1 or L2 where validator stake to secure the netowrk

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.