AMM algorithm, DeFi Farming APY, DeFi yield cycles

DeFi Farming APY

DeFi Farming APY Cycles: Bull vs Bear Markets — Volatility, IL Analysis, and the Shift to Sustainable Yields

Data from the 2026 market cycle reveals a structural transformation in decentralized finance liquidity provision. The era of triple-digit annual percentage yields has concluded, replaced by a yield environment where risk-adjusted returns determine protocol viability. This analysis examines the mechanisms driving APY compression, quantifies impermanent loss under varying market conditions, and establishes a framework for ...