Crypto Investors Risk Losing Gains with Yield Farming

Yield farming is a way to put your cryptocurrency to work inside decentralized finance protocols. Instead of simply holding onto it, you lend it, pair it with other assets in liquidity pools, or stake it to earn fees, interest, or bonus tokens.

The biggest dangers of yield farming are smart-contract exploits and impermanent loss, which can erase gains quickly. A rule of thumb is to always check where the money actually comes from before depositing your crypto.

DeFi's total value locked climbed to $94 billion in early 2026, but that growth hasn't made the risks disappear. To get started with yield farming, define your yield source and understand how returns are generated from trading fees, lending interest, or token emissions.