# Yield Farming Explains Crypto Returns

> Crypto yield farming uses lending, trading fees and token rewards to generate returns.
- Title: Yield Farming Explains Crypto Returns · TokenPost | Shortify
- Summary: Crypto yield farming uses lending, trading fees and token rewards to generate returns. Yield farming in DeFi strategies earns returns through lending…
- Keywords: yield farming, decentralized finance, lending, trading fees, token rewards, apr, apy, crypto, finance, Yield, Farming, Explains
- Source: TokenPost — https://tokenpost.com/news/investing/33293
- Published: 2026-10-16T13:51:35+00:00
- Read time: 1 min
- Topics: yield farming, decentralized finance, lending, trading fees, token rewards, apr, apy, crypto, finance
## What is yield farming
Yield farming places crypto assets in decentralized finance strategies that may earn lending interest, trading fees or token rewards.
## Where yield comes from
In a lending market, interest is tied to a supply rate that changes with pool utilization and governance parameters.
## Liquidity provider earnings
Liquidity providers may earn fees from trades in a pool or receive token incentives set by a protocol.
## Reinvestment process
Some vaults collect rewards, swap them into the vault’s underlying asset and redeposit them automatically.
## APR and APY differences
Annual percentage rate expresses an annualized return without compounding while annual percentage yield includes compounding.
## Risks in yield farming
Liquidity providers face impermanent loss, smart-contract risks and liquidation risks when borrowing.
## Key takeaway

Yield farming in DeFi strategies earns returns through lending interest, trading fees or token rewards.