Yield Farming Crypto Guide. Liquidity pools have better yields than money markets, but there is additional market risk; They do so by providing liquidity, which is commonly associated with assets and markets.
Yield farming, also referred to as liquidity mining, is when users stake their cryptocurrency holdings to give them rewards in the form of tokens. We are going to show tax treatment of yield farming on the example of the “maximize comp mining” on instadapp. Table of contents what does yield farming vs staking mean?
While this might change in future, almost all current yield farming.
For example, users can deposit their crypto assets in a defi protocol like compound and earn reward tokens (similar to interest) which in turn are lent out to other defi platforms to earn more rewards. This is very different from hodling, as it requires more work than just keeping things in place while other crypto players move their assets in and out of the market. There’s also the risk of artificial demand and price manipulation. At the end of this series, you're going to.