Staking Rewards vs Liquidity Mining
**Staking** usually locks one asset for protocol or network rewards. **Liquidity mining** pays LP providers—often two assets plus reward tokens—with **IL** risk.
Step by step
1. Net APR
Subtract IL and gas from advertised mining APR.
2. Reward token sell pressure
Farm tokens may dilute quickly—model exit liquidity.
3. Lockup terms
Staking may slash or lock; farms may have vesting.
Staking vs mining
Staking is simpler; mining chases higher headline yield with more risk.
- Staking: Single asset; clearer risk profile.
- Liquidity mining: LP + emissions; IL + contract risk.
Use our calculators
Common mistakes
- Treating farm APY as guaranteed
- Ignoring unlock schedules
FAQ
Can I do both?
Yes—diversify; size each bucket to risk tolerance.