Ledger LandISSUE #54 of 90

yield farming · liquidity mining

BlockyVSDouble-Spend Dan

Blocky saysYield farming earns rewards by providing liquidity or staking — often paid in protocol tokens.

To bootstrap usage, protocols pay liquidity mining rewards (extra tokens) to people who supply liquidity or stake. Advertised APYs can look huge, but they're often inflationary token emissions whose value can fall, on top of impermanent loss and smart-contract risk. "Farming" yield means constantly weighing real return against token dilution and risk — high headline APY is not free money.

Power-ups you unlock

Rewards for supplying liquidity/staking
Often paid in inflationary protocol tokens
Headline APY ≠ real, risk-adjusted return
Stacks IL + token dilution + contract risk

Double-Spend Dan attacks — common mistakes

Chasing high APY without counting risks
Ignoring token emission/dilution
Forgetting impermanent loss eats returns

Boss battleList three things that can make a 200% APY far less than it looks.

Example code

<!doctype html><html><head><meta charset="utf-8"></head>
<body style="background:#06040d;color:#e6e0ff;font-family:monospace;padding:20px"><pre>200% APY in token X
− token X price drops
− impermanent loss
− contract risk
= real return ≪ headline</pre></body></html>

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