Not all liquidity mining sites or DeFi sites are scams, the details are a bit more complicated.....
By icetoad
A lot of the victims of the operation are convinced that all liquidity mining sites are scams or all of DeFi is a scam. That simply isn't true, but the terminology used in the passive earning space for crypto isn't very straight forward. Crypto scammers typically use what I call a "word salad" of various terms to make their scam opportunities sound legit and appealing, though taken as a whole their descriptions and fluffing of their programs mean little. Often terms are used incorrectly and may even conflict with each other. I wrote the following up to clarify on some of the real details that need to be explained if people are going to properly understand crypto beyond just the buy and sell buttons on their favorite exchange. Hopefully it helps.
There are real DeFi applications through dApps with URLs. The most well known would be Uniswap https://app.uniswap.org/#/swap, but other good ones are Aave, Compound, and Yearn. These are typically found on the Ethereum blockchain. Pancakeswap is a well known one on the Binance Smart Chain, though personally I feel like most of the coins on there are shitcoin pump and dumps or rug pulls (see Squid Game).
The terminology for DeFi isn't very straight forward and clear, particularly because certain words are repeated but have different meanings. To illustrate, what investors do on Uniswap or Pancakeswap would be considered "liquidity pooling" or "liquidity mining." You put equal value of two different coins/tokens into the protocol, whereas with the scam USDT dApps you are only using USDT and you aren't even depositing it technically. Things get more complicated when you move to newer DeFi dapps that have their own tokens. The proper term for the application there would be "yield farming". Yield farming and liquidity mining have slight differences but the same basic concept.
When we move on to the term "staking", this is where common usage has definitely run amuck. Some people use this term very loosely to apply to any passive earning opportunity in the crypto space, including the DeFi specific yield farming and liquidity mining. The proper meaning of staking is very different from this. Staking involves putting up a native blockchain asset (like Ether on Ethereum) in order to assist the consensus mechanism (security) of the chain and in return earn a percentage (typically variable rate depending on the blockchain and staking participation rate) of coins back. This could be thought of in a similar way to interest in a bank account, though we all know bank accounts in the 21st century don't really earn any meaningful interest. That was more of a 20th century thing. Staking isn't an option on proof of work blockchains like Bitcoin or Ethereum 1.0. This opportunity comes with proof of stake blockchains like Cardano, Ethereum 2.0 and Solana.
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