How yield generation works on STONfi — a practical breakdown

If you're active in DeFi, understanding the mechanics before committing capital matters. Here's how STONfi's yield system actually works.

Three distinct mechanisms:

1. Liquidity provision
You deposit a token pair into a STONfi pool. In return you receive LP tokens representing your share of the pool. Every swap that routes through that pool generates a fee, a portion of which goes to LPs proportional to their share.

Risk to understand: impermanent loss. If the price ratio of your deposited pair shifts significantly, you may end up with less value than simply holding the tokens. This is not unique to STONfi , it applies to all AMMs.

2. Yield farming
You stake LP tokens into a farming pool and earn $STON rewards on top of swap fees. This adds a second income layer. The STON/USDt V2 pool currently has a Boost Farm with elevated rewards for $STON stakers.

3. $STON staking
Staking $STON tokens unlocks boosted APR across farming pools. This creates a compounding incentive structure, more $STON staked, higher the farming multiplier.

What's changing in Q2 2026
Concentrated liquidity is the next upgrade. In theory, this lets LPs deploy capital more efficiently by focusing it within a chosen price range rather than spreading it thinly across the full curve. The practical effect on APRs will depend on how liquidity distributes post-launch worth watching closely.

Note: I'm a STONfi ambassador. Yield rates fluctuate based on pool activity and token prices. This is not financial advice, assess the risks yourself before providing liquidity.

#STONfi #TON #YieldFarming #DeFi #LiquidityProvision