Unsustainable Yield Farming: Why Most Crypto Rewards Don't Last

When you hear about a crypto project offering 1,000% APY for staking tokens, that’s not a gift—it’s a warning. Unsustainable yield farming, a practice where crypto projects lure users with artificially inflated returns that can’t be maintained long-term. Also known as high-APY farming, it’s a common trap in DeFi where token emissions are dumped too fast, liquidity dries up, and prices crash within weeks. These schemes don’t fail because they’re poorly coded—they fail because their economics are built on lies.

Behind every unsustainable yield farm is a broken tokenomics, the system that controls how a crypto token is created, distributed, and valued. Also known as token economy, it’s the engine driving rewards—and when it’s designed to burn through cash fast, users become the fuel. Projects pump out new tokens daily to pay early investors, creating a Ponzi-like loop: new people join to earn high returns, but there’s never enough real demand to support the token’s price. Once the hype fades, the price plummets, and the remaining holders are left with worthless coins. You’ve seen it happen with Peanut.Trade (NUX), a token that gave out 35.50 tokens per user in 2021 but now trades for less than half a cent. Also known as NUX token, it’s a textbook case of yield farming that burned out. The same thing happened with CAKEBANK, a token with no official team, no exchange listings, and a price so low it’s practically invisible. Also known as Cake Bank token, it’s not a scam because it’s fake—it’s a scam because it pretended to be real. These aren’t isolated cases. They’re the norm.

What makes these farms so dangerous isn’t just the loss of money—it’s the false belief that high returns mean a project is strong. Real DeFi projects like Minswap or Cardano-based DEXs earn rewards through sustainable trading fees and real user adoption. Unsustainable farms rely on new money coming in to pay old users. No new users? No payments. It’s that simple. If a project doesn’t explain how it makes money beyond token emissions, walk away. You’ll find dozens of these failed farms in the posts below—some with names you’ve heard, others buried in the debris of crypto’s boom-and-bust cycle. What they all share is the same fatal flaw: they promised too much, too fast, and had nothing left to give.