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Yield Strategy Index
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Yield Strategy Index ÔÇö Passive vs Active Income Methods in DeFi
This index categorizes yield strategies based on how much time, effort, and risk a user must take to earn consistent returns. It compares passive holding rewards to more active techniques like liquidity farming and manual compounding. Matching your strategy to your lifestyle and risk tolerance is key in DeFi.
Use Case: Helps DeFi users decide how hands-on or hands-off they want to be ÔÇö and what kind of tools or tokens match their goals.
Key Concepts:
- Passive Yield
- Active Farming
- Manual Claiming
- Auto-Compounding
- APR vs APY
| Strategy | Effort Level | Compounding | Risk Level | Platform Examples | Notes |
|---|---|---|---|---|---|
| Holding $KAG / $KAU | Very Low | Yes (via HolderÔÇÖs Yield) | Low | Kinesis | Real asset-based yield with no token farming |
| Staking Native Token | Low | No (manual restake) | LowÔÇôModerate | $ADA, $ETH, $HBAR, $FLR | Simple to set up; restaking often required |
| Liquid Staking ($sFLR, $stETH) | Low | Yes (auto accrual) | Low | Sceptre, Lido | DeFi composability + passive growth |
| Auto-Compounding Vault | Medium | Yes | Moderate | Beefy, Cyclo.Finance, SparkDEX | Yield is maximized but can include platform risk |
| Manual Yield Farming | High | No (must harvest & reinvest) | High | Uniswap, BlazeSwap, Pangolin | Subject to impermanent loss + token inflation |
| Lending/Borrowing | Medium | No | Moderate | Kinetic, Aave, Compound | Stable income, but liquidation risk on borrowing |
| Referral Programs | Very Low | Yes (via bonus payouts) | Low | Kinesis, CEX platforms, DeFi protocols | Passive but dependent on external adoption |