Yield farming

The practice of moving capital across DeFi protocols to maximize token rewards.

Yield farming describes actively shifting deposits across DeFi protocols to capture the highest combined yield — interest, fees, and incentive token emissions. Farmers typically deposit into the highest-paying pool, claim rewards, sell them, and rotate to the next opportunity, often within days or hours.

Most yield farming returns come from incentive emissions of newly minted tokens, not from real fee revenue. When emissions stop or token prices fall, yields collapse and capital flees. "Real yield" is the counter-trend: protocols paying out share of actual fees in blue-chip assets rather than inflationary native tokens.