Yield farming vs Staking vs Lending

By cryptne3d | Saikot's blog | 2 Mar 2022


I have been dealing with crypto passive income for a long time. Nowadays, there are many platforms in the market where you can quickly get a certain amount of APY return by depositing your holding. Although with this simple, there is a risk of loss, scam, anger pool. We can usually make passive income from crypto in these three ways. Today I will try to give some basic ideas of these three types.

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Yield Farming
They add coins to anyone's decentralized liquidity pool to earn a good return on investment money. To make things easier, let's take an example: an exchanger whose job is to exchange dollars for any currency within their users, but the exchanger has no money of its own to get their work done. If a person gives both the currency and dollars equal to the exchanger, any exchanger user can now transact that currency and dollars properly. If a user makes a transaction between the currency/dollar in that exchanger, then some part of the transaction fee will be paid to that payer, calculated as APY% return of a certain amount of money. The reality is, suppose I have some BNB and some random coins (say "X"). Now I divide these two coins evenly in a DEFI exchanger, giving them liquidity. Now, if anyone makes any transaction between the BNB and Coin' X' on that exchanger, I will get some of the fees for that transaction. The exchangers add many more opportunities and limitations, creating an interface like their own.
Many platforms in the market are coming up with good returns based on Yield Farming. Its popularity is increasing day by day for the benefit of good returns, transparency, and passive income. Any user can start Yield Farming by putting dollars in his metamask.
In the case of risk, there are risks of Inparmaent Loss, Scam, Pool Contract. But if you can understand and invest, you can expect a good return. Usually provides 30/40% -150 / 200% APY. This% depends entirely on the condition of the platform, the amount deposited in the liquidity pool and the number of daily transactions in that pool.

Staking
Stacking is when you deposit some coins somewhere instead, the platform will give you some returns at the end of the day—this type of method we usually see on many media. You will get the benefit of stacking in two places (DEX, CEX). DEXs have more APY than CEX, and users earn 5-30% APY by stacking. Many projects run their ecosystem on the POS (Proof of Staking) method.
When it comes to stacking, there is the risk of scams. In Proof of Stacking, you will usually get more block rewards the more coins you hold. One such proof of stacking cash is Diponion.

Lending
You can get a certain amount of interest by borrowing your deposited or holding coins on any platform. For example; You have BNB now, but you want to keep this holding for the long term. Then you can lend your deposited BNB to any platform, and instead, they give you some interest. There are many types of media available in the market today. You will get loans in DEX (Decentralized Exchange), CEX (Centralized exchanges) and other investing platforms. P2p lending facility has been introduced in the market, through which one user can do Lending and Borrowing directly with another user. This method usually has APY up to 5% -30%.
There is a risk of account hacking and scam in the lending method. Investors need to invest with DYOR in mind.
There are and will be many opportunities in the market. Before investing, know well about that platform, then invest. If there is any mistake in the writing, you will look at it with a forgiving look, and if there is any mistake in the information, you can share it here.

 

The article was also published in my Bitcointalk profile: https://bitcointalk.org/index.php?topic=5387755.msg59388644#msg59388644

The article translated from: www.coinalap.com/yield-farming-staking-lending/

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cryptne3d
cryptne3d

Cryto Nerd


Saikot's blog
Saikot's blog

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