Liquidity Mining

Yield Farming vs Staking vs Liquidity Mining
  • Staking locks crypto for the network to function in return of fees
  • Yield farming involves lending your money in return of interest through fees (like earning interest lending money to a bank)
  • Liquidity Farming is when you provide crypto to liquidity pools and in return get Native/LP tokens + Governance Tokens
  • Yield Farming is a subset of staking
    • While yield farming supplies liquidity to a DeFi protocol in exchange for yield, staking can refer to actions like locking up 32 ETH to become a validator node on the Ethereum 2.0 network.
    • Farmers actively seek out the maximum yield on their investments, switching between pools to enhance their returns.
  • Liquidity Mining is a subset of Yield Farming
    • The primary difference is that liquidity providers are compensated with the platform’s own coin in addition to fee revenue.
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