Yield farming, also known as liquidity mining, is a DeFi strategy where cryptocurrency holders lend or stake their assets in various protocols to earn rewards in the form of tokens, interest, or transaction fees. As of February 2025, yield farming remains profitable, albeit less so than in previous years due to reduced incentives and competition. The DeFi sector's total value locked reached $129 billion in January 2025, a 137% year-over-year increase, with projections suggesting it could exceed $200 billion by year-end. Navigating yield farming involves choosing a reliable platform, selecting a liquidity pool, and engaging in risk management tactics to mitigate risks like impermanent loss. Calculators can help estimate potential returns by factoring in supplied capital and rewards. The future of yield farming appears to be moving toward more sustainable models, with real yield generation and AI-driven strategies gaining traction. Overall, while risks exist in yield farming, it remains a strategy with potential for high returns.

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