Staking and yield farming are DeFi’s answer to passive income strategies involving cryptocurrencies and tokens. For market participants looking for alternatives to active trading or to diversify the risk profiles of their investments, staking and yield farming offer fixed or variable returns, usually quoted in annual percentage yield (APY), on held digital assets.
Staking: The process of committing digital assets to support a blockchain network and confirm transactions. It's available with cryptocurrencies that use the proof-of-stake model to process transactions. Return is generated as a reward for correctly validating transactions.
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