Farming

Farming (also called yield farming) is a DeFi method where users deposit token pairs into liquidity pools, receive LP tokens representing their share, and earn transaction fees and additional rewards. It offers higher potential returns than single‑token staking but introduces risks such as impermanent loss.

How farming works#

Liquidity pools contain two tokens in equal value (e.g., TON/USDT). When a user adds assets, they become a liquidity provider and receive LP tokens that track their proportion of the pool. Every trade that occurs in the pool generates fees, which are distributed to LP token holders proportionally to their share.

Rewards and withdrawal#

Rewards are paid in the pool’s native token or a designated incentive token. They can be claimed after a defined lock‑up period or once a minimum reward threshold is reached. Returns are usually expressed as APY (Annual Percentage Yield), which accounts for compounding frequency.

Risks#

Farming exposes participants to two main risks:

• Platform risk – smart‑contract bugs or exploits can lead to total loss of deposited assets.
• Impermanent loss – when the relative price of the paired tokens diverges, the value of the withdrawn assets can be lower than simply holding the tokens.

Farming on TON#

The TON ecosystem supports farming on DEXes such as STON.fi and DeDust.

Step‑by‑step example (STON.fi)

1. Connect your TON wallet and open the Pools tab; enable “Farming available”.
2. If no liquidity is present, click Add Liquidity and deposit a token pair (e.g., TON/USDT).
3. After liquidity is added, the Farm button appears on the pool page.
4. Click Farm, adjust the amount of LP tokens to allocate, and confirm the transaction in your wallet.
5. Rewards and lock‑up duration are displayed on the pool page; withdraw once the farm’s conditions are met.

Farming vs. staking#

See also#

• STON.fi
• DeDust
• staking
• defi-liquidity-funding-program