Finance glossary
Yield Farming
Definition
Earning rewards by lending or staking crypto in DeFi protocols.
Yield farming involves moving crypto across DeFi protocols to maximize returns from interest, fees, and token rewards. It can offer high yields but carries risks from smart contract bugs, volatile reward tokens, and impermanent loss, making it a strategy best suited to experienced users.
In a sentence
Chasing the highest returns, she moved her crypto between protocols in a round of yield farming.
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