DeFi Yield Farming Guide 2026
Yield farming lets you earn 5-50% APY by providing liquidity. Here is how it works.
Warning: Not risk-free. Smart contract bugs, impermanent loss, and rug pulls are real.
How It Works
- Deposit token pair (e.g., ETH + USDC) into a liquidity pool on Uniswap
- The pool uses your tokens to facilitate trades
- You earn trading fees + token rewards
- APY depends on volume, pool size, and token incentives
Top Platforms
| Platform | Chain | Avg APY | Risk |
|---|---|---|---|
| Uniswap V4 | Ethereum, L2s | 5-30% | Low-Med |
| Aave V4 | Multi-chain | 2-15% | Low |
| PancakeSwap | BNB Chain | 10-50% | Medium |
| Aerodrome | Base | 15-80% | Med-High |
Understanding Impermanent Loss
When one token in your pair changes price significantly, you may end up with less value than holding. Use our calculator to model outcomes.