All terms
Doing whatever a protocol rewards, specifically to earn the reward.
Farming is optimizing for an incentive: providing liquidity for emissions, transacting for points, or using a protocol repeatedly to qualify for an expected airdrop. Airdrop farming is the most common form.
The economics are frequently worse than they look. Gas, spreads, impermanent loss and the capital tied up are real costs paid now against an uncertain reward later, and a farmed airdrop that arrives is often worth less than what it cost to earn.
Protocols increasingly filter farmers out deliberately, because a user who arrives for a reward and leaves when it ends is not the user they were paying for.
Running dozens of wallets through a testnet for a year, then finding the eligibility rules exclude exactly that pattern.
That the advertised yield is the return. Headline rates are usually paid in the protocol's own token, which the farmers are selling continuously. Net of that emission and the price it falls to, the real return is often negative.
Common questions
What is the difference between farming and investing?
Why do farm yields fall so fast?
Where this comes up on the site
The guides that actually use this word, rather than a list of everything we have written.
Where to go next
More defi terms
Want this explained out loud?
Some of these land faster in conversation than in writing. Sessions are one to one and you can ask anything, including the things that feel too obvious to ask.