@dollies
Staking and yield farming both tie up tokens in smart contracts, reducing the available circulating supply and thus potentially increasing demand. Staking involves locking up coins to support the network, often in exchange for rewards, which can reduce market liquidity. Yield farming, on the other hand, offers liquidity providers returns by locking their tokens in decentralized liquidity pools. Both practices create incentives to hold rather than sell, often leading to upward price pressure. However, they can also lead to volatility, especially when rewards or incentives change, prompting investors to quickly adjust their positions.
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