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Two very popular ways to earn from the cryptocurrency world are staking and yield farming. These methods are ideal for those who want to avoid the risk of direct trading or buying and selling and want to make regular profits from their idle crypto.

1. What is staking and how to earn?

Staking is the act of "locking" or depositing your cryptocurrency to help verify the validity of a particular network's blocks. It basically works on a proof-of-stake (pos) mechanism. When you stake your coins, the network uses them to verify transactions. In return, the network gives you new coins as rewards or 'rewards'. It's like making a fixed deposit in a bank and earning interest. Typically, rewards range from 5% to 15% per year (this varies depending on the coin). Ethereum (eth), Solana (sol), Cardano (ada), Polkadot (dot). It is relatively safer and easier than yield farming.

2. What is yield farming and how to earn?

Yield farming is an advanced strategy of decentralized finance (defi). Here you lend your crypto assets to a 'liquidity pool' so that other traders can swap from there. You deposit a pair of coins (such as USDT and ETH) in a liquidity pool. When someone makes a transaction using this capital you provided, you receive the 'trading fee' and the project's own token as a reward. The rate of return here can be very high (20% to 100% or more annually). But the risk is also high. Popular platforms are Uniswap, PancakeSwap, Aave. There is an opportunity to make a large profit in a very short time.

3. Staking vs Yield Farming

Features	Staking	Yield Farming
Complexity	Quite simple.	Somewhat complex and requires technical knowledge.
Risk	Low (mainly risk of coin price falling).	High (impermanent loss and smart contract risk).
Profit	Fixed and moderate.	Variable and can be very high.
Scope of work	Blockchain network level.	DeFi protocol level.

4. Main risks of income from these methods

If you stake a coin and the price of that coin drops by 50% in the market, the value of your capital will also decrease, along with the profit you earned. Impermanent loss mainly occurs in the case of yield farming. If the price ratio of the two coins in the pool changes too much, you may lose capital when withdrawing your liquidity. Often, staking locks the coins for a certain period of time (e.g. 30 or 90 days). You will not be able to sell those coins in an emergency. If the DeFi platform is hacked or there is a mistake in the coding, all your funds may be lost.

5. Tips for investors

It is wise to diversify rather than keep all your capital in one coin or platform. Choose established projects (e.g. Binance, Lido, Aave) instead of investing in unknown projects just for the sake of high profits. Always use your own hardware wallet or a reliable software wallet.

Conclusion

Staking and yield farming are excellent ways to earn passive income or idle income. However, before investing, you should definitely check the background and risks of that project thoroughly. Today's discussion concludes here. I hope you've found it interesting. Please share your thoughts on today's topic. Prayers for everyone. May everyone be well. Amen.

Me behind the camera & keyboard

I’ve always loved sharing my passions with you — from crypto and movie reviews to photography, storytelling, and blogging. Now, continuing that creative journey, I’ve stepped into a brand-new world — Gaming ! 🎮 | 🎥 On my YouTube channel Bokhtiar The Survivor — I’m consistently working to bring you the raw thrill of my gaming experiences — the emotions, the excitement, and those unforgettable moments that make every game feel alive.