Fourth Education: Liquidity Pools (LPs) vs. Single-Sided Staking
Both generate yield, but the risk is different. In LPs (e.g., in $CAKE), you deposit two assets and earn fees, but you run the risk of Impermanent Loss (IL). In Single-Sided Staking (e.g., $ATOM), you deposit only one asset for network security, with generally lower risks. Understanding this difference is crucial for building your passive income strategy in DeFi according to your risk appetite.
Compare the strategies. Click on CAKE to explore the LPs and on ATOM to see the native staking options and decide what is best for you.