Double Yield

Definition ∞ Double Yield describes a strategy in decentralized finance (DeFi) where users earn rewards from two distinct sources simultaneously. This often involves staking an asset to receive initial rewards, then using the resulting liquid staking token in another DeFi protocol to generate additional returns. This approach aims to maximize capital efficiency and overall return on investment. It represents an advanced form of yield generation within the digital asset space.
Context ∞ The state of Double Yield protocols involves continuous innovation in DeFi to create more efficient and composable yield-generating opportunities. A key discussion surrounds the associated risks, such as smart contract vulnerabilities and fluctuating token prices, which can affect the stability of combined returns. Critical future developments include enhanced security audits and clearer risk disclosures to safeguard participant assets.