Liquidity Mining versus Staking

This small guide should help you decide on the usage of Liquidity Mining or Staking. In addition, it also indicates the pros and cons whether you should directly use the DeFiChain or use a service provider like Cake.

Liquidity Mining (LM)

- Rewards are displayed as APR (without compound interest)

Pros

- The risk is diversified, as investment and rewards are in DFI or DUSD and another coin.

Cons

- Possible impermanent loss. However, this is negligible if you use LM as a cash flow strategy

Staking

- Rewards are described as APY (with compound interest)

Pros

- DFI price is the only risk

Cake or DeFiChain?

Cake:

Pros

- Easier to use

- LM and Staking are possible (any amount)

- Possibility to freeze to gain additional rewards

Cons

- 15% fee (reduction possible through freezer lockup)

- Platform risk

- KYC necessary

- Withdrawal partially delayed

DefiChain Wallet/Masternode

Pros

- LM is possible (any amount)

- Rapid withdrawal

- No deduction on income

- No KYC and your keys - your coins

Cons

- Staking (must be 20,000 DFI or more)

- Smart contract risk

- More difficult to operate