Yield Farming vs Simple Staking
**Simple staking** locks one asset for network or protocol rewards—predictable but often lower APR. **Yield farming** adds LP positions, leverage, or reward tokens—higher headline APR with **IL**, smart-contract, and token dump risk.
Step by step
1. Net APR after IL
Use IL calculator before chasing farm APY.
2. Reward token liquidity
Farm emissions in illiquid tokens may not be sellable at quoted price.
3. Time cost
Harvesting, compounding, and migrating farms has gas and attention cost.
Farming vs staking
Staking fits long holds; farming fits active managers who monitor risk daily.
- Simple staking: Single asset; fewer moving parts; lockups common.
- Yield farming: Higher advertised yield; IL + contract risk.
Use our calculators
Common mistakes
- Ignoring IL on LP farms
- Leaving rewards unclaimed past emission end
FAQ
Is 200% APY real?
Often annualized short-term incentives—not sustainable long-run return.