Topic: Yield farming vs Staking (Read 379 times)

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

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.

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.

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?

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.


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

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.

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.

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.

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?

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

The main goal is earning a reward in which ever route you chose to take. To me, yield farming will be a better choice ( i.e providing stable coins liquidity to a pool) especially in the bear period. Staking is also good but most staked coins tends to lose their value as a result of market downtrend. And this can hinder the amount of profit that could have been made.  They both have more similarities but slightly difference left for users to figure out.

Both processes are quite similar, as other users have already suggested, with the main difference being that staking is focused on earning rewards for holding and validating transactions on a blockchain network, while yield farming and liquidity mining are focused on providing liquidity to decentralized exchanges and liquidity pools to earn rewards. Both sound way too similar, and to be honest, the result is practically the same for the end user. As someone who has been active in liquidity mining and staking and has participated in both investment types in the past few years, I never distinguished any differences and also believed that it's practically the exact same thing. Both options share the same risks regarding smart contracts, vulnerabilities, exploits, and impermanent loss.

By staking you contribute to the security of a blockchain, and this is good.
By lending you contribute to the liquidity of a market, and this is good.

One man's meat is another man's poison.

The question is,  do the validator you delegates your coins to have access to the wallet since it is a smart contract,  because what we are trying to separate is custodial and none custodial which also represents the freedom by both you and the smart contract on the control of the connected wallet.


So this ball down to the same thing which is,  centralization/control over your coins.


As far as I know,  both yield farming and staking involve one thing which is the loss of control of your coins but the difference is that,  in staking,  you have to send your coin out of your wallet to the API smart contract address on the platform,  but in yield farming, you does not need to send your coins to a smart contract but have to grant access to them through wallet connect using a smart contract.


The similarity between both of them is that,  there has equal access to the control of the assets you provided for qualities so a scam smart contract can go away with your coins at any time.

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.