Yield Farming
Chasing DeFi returns by moving capital between protocols' incentives — sophisticated, competitive and full of tail risks.
Yield farming deploys capital across DeFi — lending, liquidity pools, staking, incentive programs — hunting the best risk-adjusted (or just biggest) APY, often stacking protocol token rewards on top of base fees. DeFi Summer 2020 made it a phenomenon; by 2026 it’s a professionalized, thinner-margin game.
The recurring physics: outsized yields are payment for outsized risks — impermanent loss, smart-contract exploits, reward-token collapse, rug pulls — or they’re subsidies with an expiry date. The farmer’s real edge is risk accounting: denominating returns honestly (in the asset you care about, after all losses), not in a token printed to pay you.