Is Staking Safer From Yield Farming
Yield farming and staking may seem similar but they are different
They are alike because people need to lock up their tokens to earn rewards, but different because of their elements
Staking is easier to do compared to yield farming
The former is a seamless way of earning passive income, as all the user needs to do is add their tokens to a stake pool run by a node or validator
Yield farming is riskier than staking, as yield farmers have to think about security risks, potential rug pulls, and so on
If hackers find a loophole in the smart contract of the liquidity pool, they can drain the funds, making farmers lose their holdings in the pools
Yield farming can offer higher APY compared to staking. It can range from 1% to 1000% returns depending on the project.
Both are a good way of earning a passive income. However, we feel it depends on one’s experience and risk taking ability to decide which one would be the best for them.