Yield Farming

Yield farming is deploying capital into LP positions, staking, and lending markets to earn fees, interest, and emission rewards. Farmers rotate frequently — APYs are highest when rewards first launch and compress as more capital piles in.

The advertised APY is almost always in the reward token, which is inflationary by design. A 2000% APY on a token that drops 99% during the farm is a negative real return. Real yield (fees, interest paid in stables) is rare; emission yield is everywhere and usually a trap in disguise.