# Yield Farming

*Crypto & Digital Assets — Finicade finance glossary*

Yield farming chases returns by moving capital between DeFi protocols that pay token incentives for supplying liquidity. Headline APYs in the hundreds of percent are paid in newly issued tokens whose price usually collapses as farmers sell them, so realised returns rarely resemble advertised ones. The strategy is best understood as being paid in a protocol's equity to bootstrap its usage.

**Also known as:** liquidity mining, farming, DeFi yield

**Related terms:** [Liquidity Pool](https://finicade.com/glossary/liquidity-pool), [Staking](https://finicade.com/glossary/staking), [DeFi](https://finicade.com/glossary/defi), [Impermanent Loss](https://finicade.com/glossary/impermanent-loss), [Total Value Locked](https://finicade.com/glossary/total-value-locked)

Source: https://finicade.com/glossary/yield-farming