Staking Cryptocurrency and Yield Farming: What's the Difference?
What is Staking?
Staking is the process of holding cryptocurrency in a wallet that supports staking. When you stake cryptocurrency, you are essentially lending your coins to the network in order to help validate transactions. In return for your support, you are rewarded with additional cryptocurrency.
What is Yield Farming?
Yield farming is the process of using cryptocurrency to earn rewards. There are a number of different ways to do this, such as lending cryptocurrency to others, providing liquidity to decentralized exchanges, or participating in staking pools.
Similarities Between Staking and Yield Farming
Staking and yield farming are both ways to earn rewards from cryptocurrency. Both require you to hold cryptocurrency in a wallet for a period of time. And both can be used to generate passive income.
Differences Between Staking and Yield Farming
The main difference between staking and yield farming is that staking is a more passive way to earn rewards. With staking, you simply need to hold your cryptocurrency in a wallet that supports staking. With yield farming, you need to actively participate in the process in order to earn rewards.
Conclusion
Staking and yield farming are both viable ways to earn rewards from cryptocurrency. However, staking is a more passive way to earn rewards, while yield farming requires more active participation. The best option for you will depend on your individual circumstances and goals.
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