Plain English
Yield farming is rotating capital between DeFi protocols to capture the highest possible reward — usually a mix of trading fees, lending interest, and token incentives. The original DeFi summer activity of 2020. Still alive, just less mercenary today.
How it actually works
Farmers deposit assets in lending markets, AMM pools, or vaults; collect protocol token emissions on top of base yield; sell or compound those rewards. Returns are usually denominated in volatile incentive tokens, so the headline APY can be very different from realized return after slippage and price decay.
What it means for you
Pure yield farming is a full-time job. For most HNW allocators, the better play is structured yield (Pendle, Morpho vaults, stablecoin LPs at well-audited venues) where the base yield is real and the management overhead is small. Treat farming-token rewards as a bonus, not the thesis.
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Educational content only. Not investment, tax, or legal advice.