Farming, staking and liquidity mining. What is the difference?
🌱 Farming is a practice in which investors place their crypto assets in a liquidity pool based on smart contracts, for example ETH/USDT. Then the blocked assets become available to other users of the same protocol. Users of this particular lending protocol can borrow these tokens for use in margin trading. In fact, it is a crypto analogue of a bank deposit.
🔐 Staking is the provision of its crypto assets as collateral for blockchain networks using the PoS (Proof of Stake) consensus algorithm. For this, PoS provides stakers with the opportunity to receive rewards.
⛏ Liquidity mining is the provision of one's crypto assets (trading pairs such as ETH/USDT) to the liquidity pool of the DeFi protocol for cryptocurrency trading (not for crypto lending and borrowing). In exchange for a trading pair, the liquidity mining protocol provides users with a liquidity provider token (LP), which is necessary for a final refund.
As long as the tokens provided by the user remain in the liquidity pool, the protocol rewards him with native tokens (or management tokens – GOV) “mined” on each block, in addition to the LP that the user received earlier. The amount of remuneration depends on their share in the total liquidity of the pool. These newly mined tokens give liquidity miners access to project management, and can also be exchanged for more profitable rewards or other cryptocurrencies.
Let's see opportunities on dHEDGE
On the dHEDGE platform, users are provided with several tools for passive profitability. They include:
In order to generate a steady demand for the token, dHEDGE offers users a staking program. Go to the page https://app.dhedge.org/dht/staking and connect a web wallet to start DHT staking.
Rewards increase linearly: the longer the DHT blocking period, the more bonus DHTs you will receive.
⛏Performance mining allows you to receive rewards for investing in the best pools of the platform. In addition to the profit for the performance of the pool, the platform will charge you bonus DHT.
- Maximum reward distribution of 35k DHT per week divided among investors
- Earn up to 100 DHT per month with no vDHT staking requirement
- For rewards over 100 DHT per month, you need to have staked DHT according to this formula: Max monthly rewards = vDHT/12
🌱dUSD Farming — is the best way of risk-free income in cryptocurrency at the moment. As described above, USD farming is an analogue of a bank deposit, which allows you to safely store assets and receive a percentage of profitability for this. Let's see how dUSD farming looks on Toros (dHEDGE partner).
You can see the APY number in left-upper corner. This is the annual profit for dUSD farming. This number is calculated by extrapolation the last week's performance.
Farming is the provision of its crypto assets, which will be used to issue a crypto loan.
Staking is the provision of one's crypto assets in order to maintain the blockchain network for a fee.
Liquidity mining is the provision of its crypto assets to the liquidity pool of the DeFi protocol for cryptocurrency trading for remuneration in the form of liquidity provider tokens and management tokens.