Skip to content
Tue, Jul 14 UTC 00:19:45 CAP $1.94T
28 Fear Live
$ USD
Get The Money Layer
Smart Contracts & DeFi

What Is Yield Farming and Liquidity Providing?

In decentralized finance, users can earn returns by supplying their crypto to protocols — a practice broadly called yield farming or liquidity providing. The yields can look attractive, but so…

This article is for informational purposes only and is not financial advice.
What Is Yield Farming and Liquidity Providing?

In decentralized finance, users can earn returns by supplying their crypto to protocols — a practice broadly called yield farming or liquidity providing. The yields can look attractive, but so are the risks.

Providing liquidity

Decentralized exchanges need pools of tokens to enable trading. Users who deposit into these pools earn a share of trading fees. In return they take on “impermanent loss” — a loss relative to simply holding — when prices move.

Chasing yield

Protocols often add token rewards on top, producing eye-catching advertised returns. Those rewards can evaporate, token prices can fall, and smart-contract bugs can drain funds. “High yield” almost always means high risk, and unusually high yields are a warning sign.

Educational content, not financial advice. Crypto is volatile and you can lose money. Do your own research. Crypto Ruble Coins is a news and education publication — not an exchange, conversion, or off-ramp service.

Last updated 13 Jul 2026

About the author
Crypto Ruble Coins editorial desk

The Crypto Ruble Coins editorial desk reports and edits human-written journalism on the money layer of crypto — CBDCs, stablecoins, and crypto priced in your currency. Independent. Not financial advice.

View full profile & all articles →

Keep exploring