Yield Farming Guide 2025: How to Earn High APY on Crypto

Stifler Mom · Nov 15, 2025

Yield Farming Guide 2025: How to Earn High APY on Crypto

Introduction

Yield farming - providing liquidity to DeFi protocols (depositing token pairs into liquidity pools) to earn trading fees plus reward tokens, typically offering 10-100%+ APY compared to simple lending's 3-8% - exploded "DeFi Summer 2020" when Compound launched COMP rewards (users earning $1,000+/day), peaked 2021 with absurd 1,000-10,000% APYs from new protocols distributing worthless governance tokens, then crashed 2022-2023 as most reward tokens went to $0 and impermanent loss wiped out farmers who chased unsustainable yields. This complete yield farming guide 2025 covers what yield farming is (vs staking/lending, how liquidity provision works, LP tokens mechanics), core concepts (impermanent loss calculation, APY vs APR, reward token dilution, auto-compounding math), best platforms (Curve stablecoins, Convex boosters, Uniswap V3 concentrated liquidity, Beefy/Yearn auto-compounders), strategies by risk (safe 8-15% stablecoin farming, medium 15-30% blue-chip pairs, high-risk 50-200% new protocols), step-by-step tutorials (first farm on Curve, using Convex for boosted rewards, Uniswap V3 range orders), calculating real returns (fees, gas costs $50-200 Ethereum vs $1 Polygon, impermanent loss scenarios), risks deep-dive (losing 20-50% to IL, rug pulls, smart contract hacks, reward token crashes 99%), and 2025 reality (sustainable 8-20% on blue-chips vs 2021's fake 10,000% from ponzi tokens). Whether farming $1,000 or $100,000, this guide teaches maximizing yield while avoiding mistakes that cost farmers billions during 2021-2022 euphoria.

CRITICAL REALITY CHECK (2025): Yield farming killed more portfolios 2021-2022 than it enriched - most farmers chasing 1,000%+ APY lost 50-90% to combination of impermanent loss (ETH/shitcoin pairs), reward token crashes (farm tokens dropping 99% before you could sell), rug pulls (anonymous devs stealing liquidity), and smart contract hacks. Real data: average yield farmer who started 2021 is DOWN 40-60% vs just holding ETH, despite earning "high APY" - they lost more to IL + token crashes than they gained in rewards. What actually works 2025: Stablecoin farming on battle-tested platforms (Curve 3pool = 8-15% APY, low risk since USDC/USDT/DAI stay $1), blue-chip pairs on Uniswap V3 with tight ranges (ETH/USDC 0.05% fee tier = 15-40% APY if managed well), auto-compounding via Convex/Beefy (saves gas, optimizes returns). What doesn't work: Chasing new protocols promising 5,000% APY (99% are ponzis - token launches at $100, you farm for 2 weeks earning 1,000 tokens, by time you sell token is $0.10 = lost money despite "high APY"), volatile pairs on sketchy DEXs (impermanent loss + potential rug = double whammy). This guide focuses on sustainable farming (8-30% realistic from reputable platforms) not 2021 hopium (10,000% APY marketing for tokens that die in 30 days).

What is Yield Farming?

Understanding the concept:

Simple Definition

Yield farming = Providing liquidity to DEX (Decentralized Exchange) → Earning trading fees + reward tokens.

Basic Flow:

Deposit: You provide $10,000 worth of two tokens (e.g., $5,000 ETH + $5,000 USDC) to Uniswap pool
Receive LP token: Proof of ownership (you own 0.01% of ETH/USDC pool)
Earn fees: Every time someone swaps ETH ↔ USDC, you earn 0.3% fee (proportional to your share)
Earn rewards: Protocol pays extra rewards (UNI tokens, CRV tokens, etc.)
Withdraw: Burn LP token → Get back your ETH + USDC + accumulated fees + rewards

Simple Analogy:

Traditional: Bank borrows your deposit, lends to customers, pays you 0.5% interest (keeps 5.5% profit)
Yield farming: You = the bank (provide liquidity directly to traders), earn all the fees (~5-30% APY)

Yield Farming vs Staking vs Lending

Key Differences:

Feature	Yield Farming	Staking	Lending
What you do	Provide 2 tokens to liquidity pool	Lock 1 token to secure network	Deposit 1 token to borrow pool
Risk	Impermanent loss (price changes)	Price drop only	Smart contract risk only
Rewards	Trading fees + reward tokens	Block rewards + fees	Interest from borrowers
APY	10-100%+ (volatile)	3-10% (stable)	3-8% (stable)
Complexity	High (manage LP, IL risk)	Low (just hold)	Medium (monitor rates)
Example	ETH/USDC on Uniswap	Stake ETH on Lido	Lend USDC on Aave
Gas fees	High ($50-200 Ethereum)	Medium ($30-100)	Medium ($30-80)
Best for	Active management, high risk tolerance	Passive, HODLers	Passive, stablecoin holders

Example Returns (10,000 USDC, 1 year):

Lending (Aave):

Deposit: $10,000 USDC
APY: 5%
Earnings: $500
Risk: Smart contract hack (low probability)
Net: $10,500 (simple, safe-ish)

Staking (Ethereum via Lido):

Buy: 3.33 ETH ($10,000 at $3,000/ETH)
Stake: Get stETH (liquid staking token)
APY: 3.5%
Earnings: 0.117 ETH = $350
But: ETH price risk (if ETH drops 20% = −$2,000)
Net: $8,350 if ETH stays flat + staking rewards

Yield Farming (Curve 3pool):

Deposit: $10,000 (balanced USDC/USDT/DAI)
Base APY: 2% (trading fees)
CRV rewards: 8% (Curve tokens)
CVX boost (if use Convex): +3% (Convex tokens)
Total APY: 13%
Earnings: $1,300
Gas costs: $100 (deposit + claim + withdraw)
Net: $11,200 (13% minus $100 gas)
Risk: Impermanent loss (minimal since all stablecoins), smart contract hack, CRV/CVX token price drop

How Yield Farming Actually Works

Step-by-Step Mechanics:

1. Liquidity Pools:

What They Are:

Smart contract holding two tokens (e.g., ETH + USDC)
Traders swap against this pool (buy ETH with USDC, or vice versa)
You provide liquidity = you're funding the pool

Example Pool:

Pool contains: 100 ETH ($300,000) + 300,000 USDC
Total value: $600,000 (50/50 split always maintained)
You add: 1 ETH ($3,000) + $3,000 USDC = $6,000 total
Your share: $6,000 / $600,000 = 1% of pool

2. LP Tokens (Liquidity Provider Tokens):

What You Get:

When deposit to pool → Receive LP token (ERC-20)
LP token = proof of ownership (like receipt)
Your LP token grows in value as fees accumulate

Example:

Deposit $10,000 → Receive 100 UNI-V2 LP tokens (Uniswap V2 ETH/USDC)
1 month later: LP token now worth $10,150 (pool earned $150 fees, your 1% share = $1.50)
Redeem: Burn 100 LP tokens → Get back ETH + USDC (now worth $10,150)

3. Trading Fees:

How Fees Accumulate:

Someone swaps $100,000 USDC → ETH
Fee: 0.3% = $300
Fee distributed: All LP holders (proportional to ownership)
Your share (1%): $3

Annual Math:

Pool volume: $50M/month
Fees: $50M × 0.3% = $150,000/month = $1.8M/year
Pool TVL: $10M
APY from fees: $1.8M / $10M = 18%

4. Reward Tokens (The "Farming" Part):

Extra Incentives:

Protocol issues governance tokens (UNI, CRV, BAL, etc.)
Given to LPs to incentivize liquidity
This is the "farming" (growing reward tokens)

Example - Curve:

Provide liquidity to 3pool (USDC/USDT/DAI)
Earn: 2% APY from trading fees
Also earn: 8% APY in CRV tokens (Curve's governance token)
Total: 10% APY (2% in stablecoins, 8% in CRV)

The Catch:

CRV token can drop in price (earned 800 CRV worth $1,600, but by time you sell CRV dropped 50% = only get $800)
Real APY depends on when you sell rewards

5. Auto-Compounding:

Manual vs Auto:

Manual (Basic):

Farm for 1 week
Claim rewards (pay $20 gas)
Sell rewards for more LP tokens
Re-deposit (pay $30 gas)
Repeat weekly

Auto (Yearn, Beefy, Convex):

Deposit LP tokens to aggregator
Aggregator auto-harvests + compounds (for you)
Saves gas (compounds for all users together = splits cost)
Higher APY (compounds daily vs your weekly)

Compounding Impact:

20% APY, no compounding: $10,000 → $12,000 (1 year)
20% APY, daily compounding: $10,000 → $12,214 (1 year, +$214 extra = 2.14% boost)
Matters more at high APY: 100% APY daily compound = 171% actual return (vs 100% no compound)

Key Yield Farming Concepts

1. Impermanent Loss (IL)

MOST IMPORTANT

What It Is:

Loss compared to just holding the tokens
Happens when token prices diverge (one goes up/down more than other)

Simple Example:

Scenario: ETH pumps

Start: Deposit 1 ETH ($3,000) + $3,000 USDC = $6,000 total
ETH doubles: Now $6,000/ETH
If you just held: 1 ETH ($6,000) + $3,000 USDC = $9,000 total
But in pool (AMM rebalances 50/50):
- Pool now needs: 0.707 ETH ($4,242) + $4,242 USDC = $8,484 total
- Your share: 0.707 ETH + $4,242 USDC = $8,484
Impermanent loss: $9,000 − $8,484 = $516 (5.7% loss vs holding)

Why It Happens:

Pool maintains 50/50 ratio (Uniswap V2 constant product formula: x × y = k)
When ETH rises, pool automatically sells some ETH for USDC (to maintain balance)
You end up with less ETH than you started (sold at various prices on the way up)

IL by Price Change:

Price Change	Impermanent Loss
1.25x	−0.6%
1.5x	−2.0%
1.75x	−3.8%
2x	−5.7%
3x	−13.4%
4x	−20.0%
5x	−25.5%
10x	−42.0%

When IL is OK:

Stablecoin pairs (USDC/USDT/DAI) = almost zero IL (all stay $1)
Correlated pairs (ETH/stETH, WBTC/tBTC) = low IL (move together)
High trading fees offset IL (earn 20% fees, lose 5% IL = net +15%)

When IL Destroys You:

Volatile pairs (ETH/SHIB, ETH/DOGE) = massive IL if one token moons
Low fee tiers (0.01% Uniswap = low fees, doesn't offset IL)

2. APY vs APR:

APR (Annual Percentage Rate):

Simple interest (no compounding)
20% APR = earn 20% over year, no reinvestment
$10,000 @ 20% APR = $12,000 after 1 year

APY (Annual Percentage Yield):

Compound interest (rewards reinvested)
Assumes you claim + compound frequently
20% APR compounded daily = 22.13% APY
$10,000 @ 22.13% APY = $12,213 after 1 year

Why Platforms Show APY:

Looks higher (marketing)
100% APR = 171% APY (if compound daily)
But: You pay gas fees to compound (maybe not worth it)

Reality:

High gas (Ethereum): Manual compounding not worth it unless $50K+ position
Low gas (Polygon, Arbitrum): Worth compounding weekly-monthly

3. Token Emission / Inflation:

The Problem:

Reward tokens distributed forever (inflationary)
More tokens = lower price (supply/demand)

Example - Typical Farm Token:

Emission: 100,000 tokens/day
Current supply: 10M tokens
Daily inflation: 1% per day (100K / 10M)
Annual inflation: 365% (supply 46.5M after 1 year)
Price impact: If demand constant, price drops 78% over year (dilution)

Your APY Math:

Farm shows: 200% APY in FARM tokens
You earn: 20,000 FARM tokens (on $10,000 deposit)
But FARM price drops 80% over year
Real return: 20,000 FARM × $0.20 = $4,000 (40% gain, not 200%)

Sustainable vs Ponzi:

Sustainable: Low emissions (10-30% annual inflation), revenue source (trading fees), token has utility (governance, fee capture)
Ponzi: Infinite emissions (1,000%+ inflation), no revenue, token useless (just farm and dump)

Examples:

CRV (Curve): Decreasing emissions, fee sharing coming, sustainable
Random food coin: 10,000% APY, infinite emissions, died in 30 days

4. Auto-Compounding Math:

Frequency Impact:

Example: 50% APR

No compound: $10,000 → $15,000 (1 year)
Compound yearly: $10,000 → $15,000 (same, compound once = no benefit)
Compound monthly: $10,000 → $15,599 (51.6% APY)
Compound weekly: $10,000 → $15,788 (52.9% APY)
Compound daily: $10,000 → $16,487 (64.9% APY)

Formula:

APY = (1 + APR/n)^n - 1
Where n = compounds per year

Gas Fee Reality:

Compound cost: $50 gas (Ethereum)
If compound weekly: 52 times × $50 = $2,600/year
On $10,000: Gas eats 26% of returns (not worth it!)
Solution: Use auto-compounder (Convex, Beefy) - they batch for all users

5. Layer 2 Benefits:

Ethereum Mainnet:

Gas: $50-200 per transaction
Practical minimum: $10,000+ to justify gas
Example: $5,000 farming, spend $200 gas (enter + exit) = 4% of capital gone

Polygon/Arbitrum/Optimism:

Gas: $0.10-2 per transaction
Practical minimum: $500+ (gas negligible)
Example: $5,000 farming, spend $2 gas = 0.04% of capital (doable!)

Same Protocols, Different Chains:

Aave on Ethereum: High gas, need $10K+
Aave on Polygon: Low gas, $500 OK
APYs similar: Ethereum 5%, Polygon 5.5%

Best Yield Farming Platforms 2025

Tier 1: Stablecoin Farming (Safest)

1. Curve Finance (curve.fi)

BEST FOR STABLES

Overview:

Type: Stablecoin-focused DEX
TVL: $3-5B (2025)
Chains: Ethereum, Polygon, Arbitrum, Optimism, Avalanche, Fantom
Specialty: Minimal slippage stablecoin swaps

Main Pools:

3pool (USDC/USDT/DAI):

TVL: $1-2B (largest stablecoin pool)
Base APY: 1-3% (trading fees)
CRV rewards: 4-8%
Total: 5-11% APY
Risk: Very low (all stablecoins, minimal IL)

How to Farm:

Visit curve.fi
Connect MetaMask
Select "3pool"
Deposit: Can deposit any mix (USDC, USDT, DAI, or all three)
Receive: 3CRV LP token
Stake: Deposit 3CRV to gauge (earn CRV)
APY: 8% (example - varies)

Advanced: Use Convex for Boost

Deposit 3CRV to Convex instead
Get: Higher CRV rewards (Convex has massive veCRV boost)
Plus: CVX token rewards
Total APY: 10-15% (vs Curve direct 8%)

Pros:

Lowest IL risk (stablecoins)

Battle-tested (operating since 2020, never hacked)

High liquidity ($1B+ = easy enter/exit)

Sustainable (real trading volume, not ponzi rewards)

Cons:

Lower APY (8-15% vs 100%+ risky farms)

CRV price risk (rewards in CRV token, could drop)

Ethereum gas ($50-150 to enter/exit - use Polygon for small amounts)

Best For: Risk-averse farmers, large capital ($10K+), stablecoin holders

2. Convex Finance (convexfinance.com)

CURVE OPTIMIZER

Overview:

Type: Curve booster (deposits your Curve LP, earns extra)
TVL: $2-4B
Mechanism: Pools veCRV (vote-escrowed CRV) to boost all users' rewards

How It Works:

You: Deposit 3CRV (Curve LP token) to Convex
Convex: Stakes on Curve with massive veCRV boost
You earn:
- Base Curve rewards (CRV)
- Boosted CRV (extra from Convex's veCRV)
- CVX tokens (Convex governance token)
Auto-compound: Convex auto-harvests + compounds (saves gas)

Typical APYs (3pool):

Base CRV: 6%
Boosted CRV: +3%
CVX rewards: +2%
Total: 11% APY

Pros:

Higher returns than Curve directly (boost + CVX)

Auto-compounds (saves gas, increases APY)

Simple (deposit once, forget)

Battle-tested (never hacked, $4B TVL)

Cons:

CVX token risk (rewards partly in CVX, price can drop)

Extra smart contract (one more layer of risk vs direct Curve)

Slightly lower liquidity (but usually fine)

Best For: Curve farmers wanting extra yield without extra work

3. Aave (aave.com) + Leveraged Farming

MEDIUM RISK

Strategy: Recursive Lending

How It Works:

Deposit $10,000 USDC to Aave
Borrow $8,000 USDC against it (80% LTV)
Deposit borrowed $8,000 USDC back to Aave
Now: $18,000 USDC earning interest
Borrow $6,400 more...
Repeat 5-8 times (leverage up to 5x)

Math:

Supply APY: 5%
Borrow cost: 6%
Net loss: −1% (borrow costs more!)
But: Aave pays rewards (stkAAVE)
stkAAVE rewards: 3% on supply, 2% on borrow
Net: Supply 5% + 3% rewards − Borrow 6% + 2% rewards = +4% APY

Leverage:

5x leverage = 4% × 5 = 20% APY
Risk: If USDC depegs, liquidation (unlikely but possible)

Pros:

Higher APY (15-25% with leverage vs 5% simple)

Stablecoins (low IL risk)

Aave = safest lending platform

Cons:

Liquidation risk (if USDC depegs or rates change)

Complex (need to monitor health factor)

High gas (many transactions to set up)

Best For: Advanced farmers, risk-tolerant, can monitor daily

Tier 2: Blue-Chip Pairs (Medium Risk)

4. Uniswap V3 (uniswap.org)

BEST FOR ACTIVE MANAGEMENT

Overview:

Type: Concentrated liquidity DEX
TVL: $5-7B
Innovation: Custom price ranges (vs V2 full range)

How V3 Works:

Concentrated Liquidity:

V2: Provide liquidity across entire price range ($0 to $∞)
V3: Provide liquidity in specific range (e.g., ETH $2,800-$3,200)
Benefit: Higher capital efficiency = higher fees

Example:

V2: $10,000 liquidity across $0-$10,000 ETH = earn 0.3% on $10M daily volume = $30/day
V3: $10,000 liquidity in $2,900-$3,100 range (current price $3,000)
- Volume in range: $5M (50% of trades within $2,900-$3,100)
- Earn: 0.3% × $5M = $15,000 daily fees
- Your share (0.1% of pool): $15/day
- But: Capital efficiency 5x higher = earn $150/day (5x more!)

Best Pairs:

ETH/USDC 0.05% tier: $3,000 ± $100 range
ETH/USDC 0.3% tier: $3,000 ± $300 range (wider, safer)
WBTC/ETH 0.3%: Correlated, lower IL

APYs (Active Management):

ETH/USDC tight range ($2,950-$3,050): 30-60% APY
ETH/USDC wide range ($2,500-$3,500): 15-30% APY
Catch: Must rebalance when price exits range (gas + time)

Pros:

Highest fees (concentrated liquidity = capital efficient)

Customizable (choose your risk/reward)

Blue-chip pairs (ETH, WBTC = liquid)

Cons:

Active management (must rebalance frequently if tight range)

Higher IL (vs stablecoins)

Gas fees (Ethereum mainnet expensive - use Arbitrum/Polygon)

Best For: Active farmers, willing to manage positions, large capital ($20K+)

5. Balancer (balancer.fi)

MULTI-ASSET POOLS

Overview:

Type: Weighted pools (not just 50/50)
TVL: $1-2B
Unique: 80/20 pools, 60/40 pools (flexible ratios)

Why Different Weights Matter:

80/20 ETH/USDC Pool:

80% ETH ($8,000), 20% USDC ($2,000) on $10,000 deposit
Less IL: More exposed to ETH (if ETH moons, you keep more ETH vs 50/50)
Trade-off: Lower fees (less rebalancing = less trading = less fees)

Example: ETH 2x

50/50 pool: IL = −5.7%
80/20 pool: IL = −2.3% (less than half!)
But: 80/20 pool earns 40% less fees (less volume)

Popular Pools:

wstETH/WETH (80/20): Correlated, low IL, 8-15% APY
BAL/ETH (80/20): Hold mostly BAL, earn fees + BAL rewards
Stablecoin pools: 4-pool (USDC/USDT/DAI/FRAX), 10-12% APY

Pros:

Flexible weights (optimize for IL or fees)

Multi-asset (3-8 tokens per pool possible)

BAL rewards (governance token incentives)

Cons:

Lower volume (vs Uniswap/Curve = lower fees)

Complex (choosing weights + multiple tokens = harder)

BAL token risk (rewards partly in BAL)

Best For: Sophisticated farmers, want custom exposure (80% ETH, 20% stable)

Tier 3: Auto-Compounding Aggregators

6. Beefy Finance (beefy.finance)

BEST AUTO-COMPOUNDER

Overview:

Type: Yield optimizer (auto-compounds your farms)
TVL: $500M-1B
Chains: 20+ (Polygon, BSC, Arbitrum, Optimism, Avalanche, Fantom, etc.)

How It Works:

You: Deposit Curve 3CRV LP tokens to Beefy vault
Beefy: Auto-harvests CRV rewards (daily)
Beefy: Sells CRV → Buys more USDC/USDT/DAI
Beefy: Adds to Curve pool → More 3CRV for you
You earn: Compound growth without doing anything

APY Boost:

Manual: 10% APY (Curve 3pool, compound monthly)
Beefy: 11.5% APY (auto-compound daily, saves gas)
Boost: +1.5% (15% improvement)

Popular Vaults:

Curve 3pool: 10-12% APY
Uniswap V3 ETH/USDC: 25-40% APY (managed)
PancakeSwap CAKE: 60% APY (high risk, BSC)

Pros:

Auto-compounds (saves time + gas)

Multi-chain (works on cheap chains like Polygon)

Audited (CertiK, multiple audits)

Simple (deposit once, done)

Cons:

Extra smart contract risk (one more layer)

Beefy takes fee (0.5-1% performance fee)

Can't customize (vault strategy fixed)

Best For: Passive farmers, small to medium capital ($1K-$50K), multi-chain

7. Yearn Finance (yearn.fi)

OG AUTO-COMPOUNDER

Overview:

Type: Yield aggregator (original auto-compounder)
Founded: 2020 (Andre Cronje)
TVL: $300-500M (down from $5B peak, but survived)
Chains: Ethereum, Polygon, Arbitrum, Optimism

How It Works:

Deposit: USDC to Yearn USDC vault
Yearn: Deploys to best strategy (Curve, Aave, Compound - wherever APY highest)
Automatically: Moves capital when better opportunity (Aave 6% → Curve 8%)
Compounds: Auto-harvests + reinvests

Example - USDC Vault:

Strategy 1: 60% in Curve (8% APY)
Strategy 2: 30% in Aave (5% APY)
Strategy 3: 10% in Compound (4% APY)
Blended: 7.1% APY (weighted average)
Auto-compound: +0.5% boost
Total: 7.6% APY

Pros:

Automatic strategy optimization (moves to highest yield)

Battle-tested (since 2020, survived bear market)

Sophisticated strategies (multi-protocol, risk-managed)

Cons:

Lower APY lately (conservative strategies post-2022 crashes)

Ethereum only (high gas - $100+ to deposit/withdraw)

YFI token risk (vault fees paid in YFI, token volatile)

Best For: Large capital ($50K+), prefer sophisticated auto-management

Tier 4: High-Risk / High-Reward

WARNING: These strategies can lose 50-90% of capital

8. Leveraged Yield Farming (Alpha Homora, Gearbox)

Concept:

Borrow to multiply your position (3-5x leverage)
Example: Deposit $10,000 → Borrow $30,000 → Farm with $40,000 (4x leverage)

Math:

Base farm: 20% APY
With 4x leverage: 20% × 4 = 80% APY
Minus: Borrow cost (10% APY on $30,000) = −$3,000
Net: $8,000 earnings − $3,000 cost = $5,000 = 50% APY on $10,000

Risks:

Liquidation: If farm drops 25%, your $40,000 → $30,000 = underwater, liquidated
IL amplified: 4x position = 4x impermanent loss
Token price risk: If reward token crashes, lose everything

Reality: Most leveraged farmers lost money 2021-2022 (liquidations + IL + token crashes)

Verdict:

Not recommended unless expert + can monitor 24/7

9. New Protocol "Ape" Farming

What It Is:

New DEX launches (e.g., "PancakeSwapFork on ArbitrumFork")
Promises: 5,000% APY in FORK tokens
Early farmers: Earn millions of FORK in days

The Scam:

Day 1: FORK = $10 (low liquidity, fake price)
You farm: Earn 1,000 FORK/day = "$10,000/day!" (on paper)
Day 7: Try to sell 7,000 FORK
Reality: Liquidity $50K, your sell crashes price 90%
FORK now $0.50, you get $3,500 (vs "$70,000" claimed)
Day 30: FORK = $0.01, project abandoned

How to Spot:

Anonymous team (no doxxed founders)
No audit (or fake audit from unknown firm)
Insane APY (1,000%+ = unsustainable)
No utility (token does nothing but farm and dump)
Forked code (copy of Uniswap/PancakeSwap with logo changed)

Verdict:

AVOID - 95% of new farms are scams

10. Volatile Pair Farming (ETH/SHIB, ETH/PEPE)

The Temptation:

Meme coin pumping (SHIB +100% in week)
High trading volume = massive fees
APY showing 500% (from fees + rewards)

The Reality:

Impermanent Loss dominates:
- SHIB pumps 100% → You lose 20% of SHIB (sold during rebalancing)
- SHIB dumps 50% next week → You have too much SHIB (bought during rebalancing)
- Net: 30-50% loss from IL alone
Fees don't offset (500% APY over year, but IL happens in days)

Example:

Deposit: 1 ETH + $3,000 SHIB (total $6,000)
Week 1: SHIB +100%, earn $500 fees, but lose $1,200 IL = −$700
Week 2: SHIB −60%, earn $300 fees, lose $800 more IL = −$500
Result: $6,000 → $4,000 despite "high APY"

Verdict:

Extreme risk - Only for traders who understand IL deeply

Yield Farming Strategies (By Risk Level)

Strategy 1: Conservative (8-15% APY)

Goal: Stable returns, minimize risk

Portfolio:

60%: Curve 3pool via Convex (10% APY)
30%: Aave USDC lending (5% APY)
10%: Balancer stablecoin pool (12% APY)
Blended APY: 9.3%

Expected Returns (on $10,000):

1 year: $10,930
3 years: $13,106
5 years: $15,709

Risks:

Smart contract hacks (low probability on battle-tested platforms)
Stablecoin depeg (USDC, USDT could lose peg - rare but possible)
CRV/CVX token price drop (rewards in these tokens)

Time Commitment:

Setup: 2 hours (one-time)
Maintenance: 1 hour/month (rebalance if needed, claim rewards)

Gas Costs:

Ethereum: $200 (entry + periodic claims + exit)
Better: Use Polygon ($5 total)

Who It's For:

Beginners (learn without high risk)
Risk-averse (want stable returns)
Stablecoin holders (no price risk)
Large capital ($20K+ - justify Ethereum gas)

Strategy 2: Balanced (15-30% APY)

Goal: Good returns, acceptable risk

Portfolio:

40%: Convex 3pool (10% APY, stable)
30%: Uniswap V3 ETH/USDC 0.05% wide range (25% APY)
20%: Balancer wstETH/ETH (18% APY, low IL)
10%: Beefy vault on Polygon (35% APY, small test)
Blended APY: 19.4%

Expected Returns (on $10,000):

1 year: $11,940
3 years: $17,058
5 years: $24,392

Risks:

Impermanent loss (ETH pairs - could lose 5-15% if ETH moves)
Smart contract risk (3-4 different protocols)
ETH price volatility (30% of portfolio in ETH pairs)

Time Commitment:

Setup: 4 hours
Maintenance: 2-3 hours/week (monitor Uniswap V3 range, rebalance if needed)

Gas Costs:

Ethereum: $500 (multiple protocols)
Better: Mix of Ethereum ($4K) + Polygon ($6K) = $250 total gas

Who It's For:

Intermediate farmers (6+ months experience)
Can tolerate 15% drawdowns
Has time for weekly monitoring
$10K-50K capital

Strategy 3: Aggressive (30-60% APY)

Goal: Maximum returns, high risk tolerance

Portfolio:

30%: Uniswap V3 ETH/USDC 0.05% tight range ($2,950-$3,050) - 50% APY
25%: Convex frxETH/ETH (30% APY, correlated pair)
20%: GMX on Arbitrum (40% APY, perp DEX staking)
15%: Beefy highest APY vault (60% APY, risky)
10%: New audited protocol (80% APY, very risky)
Blended APY: 48%

Expected Returns (on $10,000):

1 year: $14,800
3 years: $32,460
5 years: $70,990

Risks:

High IL (tight Uniswap range + ETH pairs)
Smart contract hacks (5 protocols = 5 risk points)
New protocol failure (10% allocation could go to $0)
Requires constant monitoring (Uniswap V3 tight range)

Time Commitment:

Setup: 8 hours
Maintenance: 1-2 hours/day (monitor Uniswap V3, check new protocol, adjust)

Gas Costs:

$1,000+ (frequent rebalancing on Ethereum)
Better: Use Arbitrum/Polygon ($50-100 total)

Who It's For:

Experienced farmers (2+ years)
Risk-tolerant (can lose 30-50%)
Full-time attention (almost job-level commitment)
$50K+ capital (justify complexity)

Step-by-Step: First Yield Farm

Tutorial: Curve 3pool on Polygon (Beginner-Friendly)

Goal: Farm stablecoins, earn 10-12% APY

Phase 1: Setup (30 minutes)

Step 1: Get Polygon MATIC

Buy MATIC on Coinbase ($20 worth)
Send to MetaMask Polygon address
Purpose: Pay gas fees ($0.10-0.50 per transaction)

Step 2: Bridge Stablecoins to Polygon

Have: $2,000 USDC on Ethereum (in MetaMask)
Visit: wallet.polygon.technology
Click "Bridge to Polygon"
Amount: $2,000 USDC
Confirm: Pay $15-30 Ethereum gas (one-time)
Wait: 7-10 minutes
Result: $2,000 USDC on Polygon network

Phase 2: Provide Liquidity (10 minutes)

Step 3: Deposit to Curve

Visit: polygon.curve.fi
Connect MetaMask (select Polygon network)
Go to "Pools" → Find "am3CRV" (Polygon's 3pool)
Click "Deposit"
Choose: USDC tab
Amount: $2,000 USDC
OR: Balanced deposit (if have USDT/DAI too)
Click "Deposit" → MetaMask popup
Confirm: Pay $0.20 gas
Receive: am3CRV LP token (Curve LP on Polygon)

Phase 3: Stake for Rewards (5 minutes)

Step 4: Stake on Curve Gauge

Same page: "Stake" tab
Amount: All am3CRV (click "Max")
Click "Stake"
Confirm: Pay $0.15 gas
Done: Now earning CRV rewards

Or: Use Convex (Higher APY)

Visit: convexfinance.com
Switch to Polygon
Find: am3CRV pool
Click "Deposit"
Amount: $2,000 am3CRV
Approve (1st transaction): $0.15
Deposit (2nd transaction): $0.20
Earning: CRV + CVX tokens

Phase 4: Monitor & Claim (Ongoing)

Daily/Weekly:

Check: convexfinance.com dashboard
See: "Earned CRV: 0.5 CRV ($1.50)"
See: "Earned CVX: 0.1 CVX ($0.40)"
Total: $1.90 in 1 week on $2,000 = 4.9% weekly? NO!
Actually: $1.90 × 52 weeks = $98.80/year = 4.9% APY

Monthly (Claim):

Click "Claim Rewards"
Receive: CRV + CVX tokens to wallet
Options:
- Hold (bet on price appreciation)
- Sell immediately (lock in gains)
- Compound (swap to USDC, add to pool)

Cost to claim: $0.20-0.50 gas (Polygon)

Phase 5: Exit (When Done)

Step 1: Unstake

Convex dashboard: "Withdraw"
Amount: All (click "Max")
Confirm: $0.20 gas
Receive: am3CRV LP tokens back

Step 2: Withdraw from Curve

polygon.curve.fi → Pool page
"Withdraw" tab
Amount: All am3CRV
Choose: Withdraw as USDC (or balanced)
Confirm: $0.30 gas
Receive: $2,000 USDC (plus fees earned - maybe $2,150)

Step 3: Bridge Back (Optional)

If want on Ethereum: Bridge $2,150 USDC back
Cost: $15-30 gas
Or: Keep on Polygon (cheaper for next time)

Total Time:

Setup + Entry: 45 minutes
Maintenance: 10 minutes/month
Exit: 10 minutes

Total Costs:

Bridge to Polygon: $20 (one-time)
Curve + Convex: $1 (Polygon gas)
Monthly claims: $0.50 × 12 = $6
Exit: $1
Total: $28 (1.4% of $2,000 capital)

Returns (1 year on $2,000):

APY: 11%
Earnings: $220
Minus gas: −$28
Net: $192 (9.6% net APY)

Advanced Yield Farming Techniques

Technique 1: LP Management (Uniswap V3)

The Strategy:

Provide concentrated liquidity in tight range
Rebalance when price exits range
Maximize fee capture

Example: ETH/USDC on Uniswap V3

Setup:

Current ETH price: $3,000
Range: $2,950-$3,050 (±1.67%)
Deposit: $10,000 ($5,000 ETH + $5,000 USDC)
Fee tier: 0.05% (high volume)

Monitoring:

Check price every 4-6 hours
If ETH = $3,055 (exited range upward):
- Action: Remove liquidity
- Received: More ETH (pool sold USDC for ETH during rise)
- Create new range: $3,050-$3,150
- Re-deposit

Math:

Active range: 85% of time (well-chosen)
APY in range: 45%
APY out of range: 0%
Effective: 45% × 85% = 38.25% APY
Minus: Gas for 30 rebalances/year = $1,500 (on Ethereum) or $30 (on Arbitrum)
Net APY (Arbitrum): 38.25% − 0.3% gas = 37.95%

Tools:

Revert.finance: Analytics + auto-rebalance
DefiLlama: Track APY across positions
Alerts: Set price alerts (exit range = rebalance time)

Best For: Active traders, large capital ($50K+), can check multiple times daily

Technique 2: Delta-Neutral Farming

Concept:

Farm volatile pair (ETH/USDC)
Hedge ETH exposure (short ETH on derivative exchange)
Result: Earn fees + rewards without price risk

Example:

Position 1: Uniswap V3 ETH/USDC

Deposit: $20,000 ($10,000 ETH + $10,000 USDC)
Exposure: Long 3.33 ETH
Earning: 35% APY

Position 2: Short 3.33 ETH on dYdX

Short: 3.33 ETH at $3,000
Collateral: $5,000 USDC
Funding rate: −0.01% per 8 hours (pay to short)

Net Position:

ETH exposure: 3.33 long − 3.33 short = 0 (neutral)
If ETH doubles: Uniswap loses $X to IL, dYdX short gains $X (cancel out)
If ETH halves: Uniswap loses $Y, dYdX gains $Y (cancel)

Earnings:

Uniswap fees: 35% APY on $20,000 = $7,000
dYdX funding: −10% APY on $5,000 = −$500
Net: $6,500 = 26% APY (without price risk!)

Challenges:

Managing two positions (liquidation risk on short)
Funding rates vary (sometimes positive = you earn, sometimes negative)
Capital inefficiency (need $25K to farm $20K neutrally)

Best For: Large capital ($100K+), want stable returns without price exposure

Technique 3: Cross-Chain Arbitrage Farming

Strategy:

Find same pool on different chains
Farm where APY highest
Move liquidity when better opportunity

Example:

Curve 3pool APYs (same pool, different chains):

Ethereum: 8% APY (low competition, high gas)
Polygon: 12% APY (high competition, low gas)
Arbitrum: 10% APY (medium)
Optimism: 11% APY

Action:

Farm on Polygon (highest APY)
Monitor: If Optimism rises to 14% (new incentives)
Migrate: $10K from Polygon → Optimism
Cost: $20 (bridge) + $2 (exit Polygon) + $2 (enter Optimism) = $24
Gain: +2% APY = $200/year → Break even in 44 days

Tools:

DefiLlama: Compare APYs across chains
Socket: Cross-chain bridge aggregator (find cheapest bridge)
Beefy: Multi-chain dashboard (see all positions)

Best For: Medium to large capital ($10K-100K), willing to move capital monthly

Technique 4: Leveraged Stablecoin Looping

Advanced Strategy:

Setup:

Deposit: $10,000 USDC to Aave
Borrow: $8,000 USDC (80% LTV)
Deposit borrowed: $8,000 back to Aave
Borrow: $6,400 more
Repeat: 7-8 times
Final: $45,000 USDC deposited (4.5x leverage)

Earnings:

Supply APY: 5% × $45,000 = $2,250
Borrow cost: 6% × $35,000 = −$2,100
stkAAVE rewards: 3% × $45,000 = $1,350
Net: $2,250 − $2,100 + $1,350 = $1,500 = 15% APY on $10K

Farm with Levered Position:

Take $45,000 USDC → Deposit to Curve
Earn: 10% APY on $45,000 = $4,500
But: Still paying Aave borrow (−$2,100)
Net: $4,500 − $2,100 = $2,400 = 24% APY on $10K

Risks:

Liquidation (if USDC depegs or rates spike)
Complexity (managing recursive positions)
Gas (expensive to set up - $500+ on Ethereum)

Tools:

DeFi Saver: Auto-manage leverage (rebalance when close to liquidation)
Instadapp: One-click leverage (automates looping)

Best For: Expert farmers, understand Aave deeply, large capital ($50K+)

Calculating Real Returns

Example 1: Curve 3pool (Conservative)

Position:

Deposit: $10,000 USDC to Curve 3pool
APY shown: 10% (2% fees + 8% CRV)

Detailed Calculation:

Earnings:

Trading fees: 2% × $10,000 = $200 (in USDC - stable)
CRV rewards: 8% × $10,000 = $800 in CRV tokens
Total: $1,000 (before costs/risks)

Costs:

Entry gas: $50 (approve + deposit on Ethereum)
Exit gas: $30 (withdraw)
Claim gas: $20 × 4 = $80 (quarterly claims)
Total gas: $160

CRV Price Risk:

Earned: 800 CRV tokens over year
If sell immediately (monthly): ~$800 (minimal price risk)
If hold all year then sell: CRV could be worth $400-$1,200 (volatility)
Assume: Sell quarterly = $700 realized (average)

Net Return:

Fees: $200
CRV: $700
Minus gas: −$160
Net: $740 = 7.4% actual APY

On Polygon (Alternative):

Same APY: 10%
Gas: $5 total (vs $160)
Net: $995 = 9.95% actual APY (near advertised!)

Example 2: Uniswap V3 ETH/USDC (Aggressive)

Position:

Deposit: $20,000 ($10,000 ETH + $10,000 USDC)
Range: $2,900-$3,100 (tight, ±3.3%)
Fee tier: 0.05%
APY shown: 45%

Detailed Calculation:

Earnings (Best Case - Price Stays in Range):

Fees captured: 45% × $20,000 = $9,000

Costs:

Entry: $100 (create position)
Rebalances: 15 times/year × $50 = $750
Exit: $80 (close position)
Total gas: $930

Impermanent Loss (Price Moves):

ETH starts: $3,000
Average during year: $3,200 (+6.67%)
IL: −1.1% (from 6.67% price change)
IL loss: $220

Out of Range:

In range: 80% of time (tight range, ETH volatile)
Out of range: 20% (earning 0%)
Effective APY: 45% × 80% = 36%

Net Return:

Fees: 36% × $20,000 = $7,200
Minus gas: −$930
Minus IL: −$220
Net: $6,050 = 30.25% actual APY

Reality Check:

Advertised: 45% APY
Actual: 30.25% APY (33% lower after costs + IL + downtime)
Still good: 30% beats most options

Example 3: New Protocol (Disaster Scenario)

Position:

Deposit: $5,000 to "MoonYield Finance" (new protocol)
APY shown: 5,000% in MOON tokens

Week 1:

Earned: 500 MOON tokens
MOON price: $20
Value: $10,000 (doubled money already!)
But: Can't sell (no liquidity yet, or "vesting")

Week 4:

Earned: 2,000 MOON total
MOON price: $8 (early sellers dumped)
Value: $16,000 (still great!)
Try to sell: Slippage 50% (low liquidity)
Sell 500 MOON: Get $2,000 (vs $4,000 expected)

Week 8:

Earned: 4,000 MOON total
MOON price: $0.50 (massive dump, team sold)
Value: $2,000 (lost 60% despite "earning" 4,000 tokens)
Principal: Try to withdraw
Discover: Liquidity locked by team, can't withdraw

Week 12:

MOON price: $0.01
Earned: 6,000 MOON = $60
Principal: Still locked
Total loss: $5,000 → $60 (99% loss)

Lesson: 5,000% APY = worthless if token crashes 99.99%

Risks & How to Mitigate

Risk 1: Impermanent Loss MOST UNDERESTIMATED

Deep Dive:

IL Calculation Example:

Initial State:

ETH: $3,000
Pool: 100 ETH + $300,000 USDC
Your deposit: 1 ETH + $3,000 USDC (1% of pool)
Value: $6,000

ETH Pumps to $6,000 (+100%):

Pool rebalances (AMM formula: x × y = k):
- New state: 70.71 ETH + $424,264 USDC
- Your share (1%): 0.7071 ETH + $4,242.64 USDC
- Value: $4,242.64 + $4,242.64 = $8,485.28

If you just held:

1 ETH ($6,000) + $3,000 USDC = $9,000

Impermanent Loss:

$9,000 − $8,485.28 = $514.72 (5.7% loss)

Why "Impermanent"?

If ETH returns to $3,000: IL disappears (back to 1 ETH + $3,000 USDC)
Becomes permanent: When you withdraw (lock in IL)

Mitigation Strategies:

1. Stablecoin Pairs Only:

USDC/USDT/DAI = almost zero IL (all $1)
Trade-off: Lower APY (8-12% vs 30-50% volatile pairs)

2. Correlated Assets:

ETH/stETH: Both track ETH price (minimal divergence)
WBTC/tBTC: Both track Bitcoin
IL: <1% typically (vs 5-20% uncorrelated)

3. Wide Ranges (Uniswap V3):

Narrow ($2,950-$3,050): High fees, high IL if exits
Wide ($2,500-$3,500): Lower fees, lower IL
Balance: Medium range ($2,800-$3,200 = ±6.7%)

4. Fee Tier Selection:

0.05% tier: High volume needed to offset IL (volatile pairs)
0.3% tier: Better for medium volatility (ETH/USDC default)
1% tier: Exotic pairs (offsets IL from extreme volatility)

5. Calculate Break-Even:

IL at 2x: −5.7%
Fees needed: >5.7% to break even
At 35% APY: Takes 61 days to offset (5.7% / 35% × 365)
Strategy: Only farm if confident price won't 2x in 2 months

Risk 2: Smart Contract Hacks

Historical Examples:

Cream Finance (2021):

Hacked: $130M stolen
Cause: Reentrancy exploit
LPs lost: 100% of funds in affected pools

Spartan Protocol (2021):

Hacked: $30M
Cause: Logic error in LP token calculation
Impact: LP tokens became worthless

Mitigation:

1. Use Audited Protocols:

Tier 1 (lowest risk): Uniswap, Curve, Aave, Compound (5+ audits, 5+ years operating)
Tier 2: Balancer, Convex, Yearn (3+ audits, 2-3 years)
Tier 3: Newer protocols (1-2 audits, <1 year) = higher risk

2. Check Audit History:

Visit protocol website → "Audits" page
Look for: Trail of Bits, Certik, ConsenSys Diligence, OpenZeppelin
Red flag: No audits, or audit by unknown firm

3. Diversify:

Don't put 100% in one protocol
Example: $30K across 3 protocols ($10K each)
If one hacked: Lose $10K (33%) not $30K (100%)

4. Start Small:

New protocol: Test with $500-1,000 first
Wait 3-6 months (if no hack, potentially safer)
Then scale to $5K-10K

5. Insurance (Expensive):

Nexus Mutual: Covers smart contract hacks
Cost: 2-4% of insured amount annually
Example: Insure $10K = $200-400/year
Trade-off: Reduces APY (10% APY − 3% insurance = 7% net)

Risk 3: Rug Pulls

How They Happen:

Typical Rug Pull:

Anonymous team launches "SushiSwapFork" on BSC
High APY (10,000% in FORK tokens)
Early farmers earn millions of FORK
Day 7: Liquidity looks good ($2M)
Day 8: Team withdraws all liquidity (rugs)
FORK price: $10 → $0.0001 instantly
LPs: Can't withdraw (no liquidity)
Total loss: $2M stolen

Red Flags:

Anonymous team: No doxxed founders (can't be held accountable)

Unaudited: Code not checked by reputable firm

Forked code: Copy-paste of Uniswap/PancakeSwap with different name

Excessive APY: >1,000% = unsustainable (ponzi)

New domain: Website <1 month old

Migrator code: Smart contract has "migrate" function (can move liquidity)

No timelock: Team can change parameters instantly (vs 48h delay)

Mitigation:

Doxxed teams only: Founders with real names, LinkedIn, public history

Audited: Minimum 1 reputable audit (Trail of Bits, Certik level)

Timelock: Check on Etherscan - good protocols have 24-48h timelock

No migrator: Read contract (or ask AI) - should NOT have migrate function

Track record: Team's previous projects (if all failed/rugged = avoid)

Community: Active Discord/Telegram with devs present (not bots)

Rule of Thumb: If APY >1,000%, assume rug until proven otherwise

Risk 4: Reward Token Inflation

The Math:

Example Protocol:

Token: FARM
Emission: 50,000 FARM/day
Current supply: 5M FARM
Price: $5/FARM

Daily Inflation:

50,000 / 5,000,000 = 1% per day
Annual: 1% × 365 = 365% inflation (supply 23.25M after year)

Price Projection:

Assume demand constant (same buyers)
Supply 4.65x higher
Price: $5 / 4.65 = $1.08 (78% drop)

Your Returns:

APY shown: 300%
Earned: 30,000 FARM on $10,000 deposit
But FARM: $5 → $1.08 over year
Average price: $3 (assuming linear decline, actually sells throughout year)
Revenue: 30,000 × $3 = $90,000? NO
Reality: If sell monthly: 2,500/mo × ($5, $4.5, $4, $3.5, $3, $2.5, $2, $1.8, $1.5, $1.3, $1.1, $1) = $70,000
Minus: IL + gas + time = $65,000 realized
Return: $65,000 on $10,000 = 650% (great!) BUT...
Catch: If held tokens (didn't sell): $30,000 × $1.08 = $32,400 = 224% (vs 650% if sold continuously)

Key Insight: Must sell rewards frequently (don't hold inflationary tokens)

Risk 5: Liquidation (Leveraged Farming Only)

What Triggers:

Borrowed money to farm (4x leverage on $10K = $40K position)
Collateral drops 25% → Loan underwater → Liquidated

Example:

Deposit: $10,000 ETH
Borrow: $30,000 USDC (on Aave, using ETH collateral)
Farm: $40,000 position (4x leverage)
ETH crashes: $3,000 → $2,100 (−30%)
Collateral value: $10,000 → $7,000
Loan: Still owe $30,000
LTV: $30,000 / $7,000 = 428% (underwater)
Liquidated: Aave sells your ETH, you lose everything

Mitigation:

Low leverage: Max 2x (vs 4-5x possible)

Overcollateralize: 200% collateral ratio (borrow $10K against $20K ETH)

Stablecoins only: Recursive USDC (no price risk)

Monitoring: Check health factor daily (Aave shows 1.5 = safe, <1.1 = danger)

Alerts: DeFi Saver, Instadapp auto-add collateral if approaching liquidation

Conclusion

The Universal Truth:

"Yield farming = highest-risk/highest-reward DeFi strategy, capable of 20-50% APY on reputable platforms (Curve, Uniswap V3, Convex) BUT also capable of 50-90% losses from impermanent loss + reward token crashes + smart contract hacks. Reality 2025: sustainable farming = 8-20% APY on stablecoins (Curve 3pool safest), 15-40% on blue-chip pairs (ETH/USDC with active management), anything >50% APY = extreme risk (new protocols, volatile pairs, leveraged positions). Success requires: understanding IL math (can lose 20% even earning 30% fees), selling reward tokens regularly (don't hold inflationary FARM tokens), using battle-tested platforms only (Uniswap, Curve, Aave = safe-ish), and accepting 2021 is over (10,000% APY ponzi farms all dead, realistic expectations 10-30% for skilled farmers)."

Final Recommendations:

Beginners ($1K-5K):

Start: Curve 3pool on Polygon (8-12% APY, $2 gas, low risk)
Learn: Understand IL with stablecoins (almost zero) before trying volatile
Timeline: 6-12 months gaining experience
DON'T: Chase high APY new protocols (95% are scams)

Intermediate ($5K-50K):

Core (60%): Convex 3pool (10-15% APY, auto-compound, stable)
Growth (30%): Uniswap V3 ETH/USDC wide range (20-35% APY)
Satellite (10%): Beefy vaults (test different chains/strategies)
Rebalance: Quarterly (check if better opportunities)

Advanced ($50K+):

Stables (40%): Curve/Convex (stability)
Active farming (40%): Uniswap V3 tight ranges (manage daily)
Experimental (20%): New audited protocols (calculated risks)
Tools: DeFi Saver automation, Revert.finance analytics, multi-chain

Expert ($100K+):

Consider: Delta-neutral strategies (hedge price exposure)
Use: Leverage (carefully, 2-3x max on stables)
Employ: Cross-chain arbitrage (move to highest APY)
Goal: 25-40% APY risk-adjusted returns

Universal Rules:

Never farm with money you can't lose (emergency fund = bank, not yield farm)
Start with stablecoins (learn mechanics without price risk)
Use audited platforms (Curve, Uniswap, Aave = safest)
Sell rewards frequently (don't hold inflationary tokens)
Calculate real APY (minus gas, IL, token price drops)
Diversify platforms (4 protocols × $10K each > 1 protocol × $40K)
Track in spreadsheet (know your actual returns vs advertised)
If APY >100%, assume ponzi (99% are scams/unsustainable)

Join our CryptoSupreme community for ongoing yield farming discussions, strategy updates, platform reviews, IL calculators, and maximizing DeFi returns safely in 2025!

Yield Farming Guide 2025: How to Earn High APY on Crypto

Stifler Mom