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Risk Warning - Notice to UK Users  

Estimated reading time: 2 mins

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

1.You could lose all the money you invest

The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in crypto assets.

The crypto asset market is largely unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.

2.You should not expect to be protected if something goes wrong

The Financial Services Compensation Scheme (FSCS) doesn’t protect this type of investment because it’s not a ‘specified investment’ under the UK regulatory regime – in other words, this type of investment isn’t recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker here.

The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm. Learn more about FOS protection here.

3.You may not be able to sell your investment when you want to

There is no guarantee that investments in crypto assets can be easily sold at any given time. The ability to sell a crypto asset depends on various factors, including the supply and demand in the market at that time.

Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your crypto assets at the time you want.

4.Cryptoasset investments can be complex

Investments in crypto assets can be complex, making it difficult to understand the risks associated with the investment.

You should do your own research before investing. If something sounds too good to be true, itprobably is.

5.Don’t put all your eggs in one basket

Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.

A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.

For further information about cryptoassets, visit the FCA’s website here.

Yield Farming Vs Staking

Explore two popular methods of earning passive income in the crypto space: yield farming and staking. Learn how they work and choose what might suits you best.

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If you're looking to tap into the world of earning passive income in the cryptocurrency space, you've come to the right place. While both yield farming and staking provide this service, they offer slightly different means of getting there. In this article, we're exploring yield farming vs staking, and how to get started. 

Both yield farming and staking fall under the DeFi (decentralized finance) umbrella. This aspect of the industry allows users to lend and borrow cryptocurrencies, similar to the traditional banking system. DeFi lending platforms and liquidity pools provide users with an alternative way to earn passive income, offering varying interest rates and methods of doing so. 

What Is Yield Farming?

Yield farming involves users lending their tokens to DeFi lending platforms. Investors can decide which cryptocurrencies they would like to use, and where they would like to invest their funds. The options range from lending platforms like Compound and Aave to decentralised exchanges (DEXs) like PancakeSwap and Uniswap. 

On a lending platform, the process typically involves a user depositing their funds on the platform, receiving both an APY (annual percentage yield) and tokens native to the platform. 

On DEXs, this alters slightly in that users need to provide one of the pair of coins as per the liquidity pool they wish to engage in. Users will then receive a percentage of the rewards of the pool based on the amount provided.

Passive income from yield farms comes from the interest paid to the borrower or the users of the liquidity pool. Yield farming is considered to be a more reliable option than trading cryptocurrency as yield farming uses smart contracts or automated market makers (AMM) to facilitate all trades. Top yield farms can be found on Ethereum, Polygon, Binance Smart Chain (BSC) and Fantom.

What Is Staking?

Staking involves locking your cryptocurrencies in a smart contract. In order to properly understand staking one will need to have a brief understanding of the Proof-of-Stake (PoS) consensus. 

While Bitcoin uses a Proof-of-Work mechanism to validate transactions through miners solving computational problems, PoS instead uses a less energy-intensive mechanism based on validators staking their cryptocurrency and generating new blocks. This is typically done in a selective process, with each validator getting a turn based on the amount that they stake. By staking in the network the validators are providing collateral to prove they are not bad actors. Ethereum is currently moving to a PoS consensus, with several other big cryptocurrencies already there.

To earn a passive income through staking users can opt to become validators on a network or participate in liquidity pools, alternatively, they can do so through a wallet or exchange that supports such activities. Pools vary in their conditions, lock-in periods (the amount of time the funds are required to stay there) and APYs.

As each staking process changes from cryptocurrency to platform, ensure that you do thorough research on the one you wish to take part in. Here are a few of the top staking coins: Ethereum (ETH), Cardano (ADA), PancakeSwap (CAKE), and Polygon (MATIC). 

Yield Farming vs Staking

While both offer excellent means of earning a passive income in the crypto space, the main difference is that yield farming involves depositing one's funds onto a DeFi platform while staking typically involves using one's funds to support a blockchain network or help validate transactions. 


Staking usually yields profits of around 5% and is expressed with a definite APY. Yield farming on the other hand can provide up to 100% returns but will require a well throughout investment strategy. 


Staking rewards are given to validators as incentives for generating new blocks while yield farming rewards fluctuate with the token's price changes and are determined by the liquidity pool. 

Lock-In Periods

Some staking pools require users to lock in their funds for a certain period of time, often also stipulating a minimum amount. Yield farming does not require either of these. 


Staking criteria are determined by the network and tied to the blockchain's consensus, users staking their funds are only at risk of losing them if they have ill intentions or act badly. Yield farming is less secure in that it relies on smart contracts and DeFi protocols, which can be susceptible to hackers if not created correctly.

Which Is Better: Yield Farming vs Staking?

Both yield farming and staking provide options in which one can earn passive income in the crypto space. While each has its advantages and disadvantages, the one offers a safer course while the other a more high-risk high reward endeavour. When it comes to deciding between the two, users should first establish how much risk they are willing to take and how comfortable they are in the DeFi space, followed by what kind of investors they would like to be.


This article is for general information purposes only and is not intended to constitute legal or other professional advice or a recommendation of any kind whatsoever and should not be relied upon or treated as a substitute for specific advice relevant to particular circumstances. We make no warranties, representations or undertakings about any of the content of this article (including, without limitation, as to the quality, accuracy, completeness or fitness for any particular purpose of such content), or any content of any other material referred to or accessed by hyperlinks through this article. We make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up-to-date.


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