When working with Yield Gap, the spread between on‑chain DeFi yields and conventional bank interest rates. Also known as interest rate differential, it helps investors gauge the extra profit possible by moving capital into crypto protocols. In simple terms, the yield gap tells you how much more (or less) you earn on a DeFi platform compared with a savings account. If the gap is wide, the market is rewarding risk takers; if it shrinks, traditional finance is catching up or DeFi risk premiums are falling.
One of the biggest drivers of the yield gap is DeFi Yield Farming, a strategy where users lock assets in liquidity pools to earn token rewards. Liquidity mining, a subset of yield farming, adds extra incentive tokens on top of trading fees, pushing on‑chain returns higher. Staking also feeds the gap by offering fixed‑rate rewards for holding proof‑of‑stake tokens. Meanwhile, Decentralized Exchanges (DEXs), platforms like SushiSwap, Uniswap and ApeSwap where users trade without a central order book, generate fee income that becomes part of the yield calculation. The basic equation looks like this: Yield Gap = DeFi APR (from farming, mining, staking) – Traditional Bank APR. This triple—Yield Gap, DeFi Yield Farming, Traditional APR—creates a clear comparison that investors can track over time.
Understanding the gap lets you spot where risk is being priced and where opportunities hide. Below you’ll find guides that break down nonce mechanics, exchange reviews, airdrop strategies and deep dives into specific DeFi projects—all of which affect the components of the yield gap. Use these resources to see how changes in fee structures, token reward rates or market volatility shift the spread, and decide whether the extra yield justifies the added risk.
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