> For the complete documentation index, see [llms.txt](https://guide.ston.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://guide.ston.fi/providing-liquidity/liquidity-provision-farming-and-staking-whats-the-difference.md).

# Liquidity provision, farming, and staking — what's the difference?

This guide is for users who already know the basics of TON and want a practical overview of how these three earn mechanics work on [STON.fi](https://ston.fi).

{% hint style="info" %}
**In short**:

✅ Liquidity provision = you add tokens to a pool so others can swap; you earn swap fees.

✅ Farming = you stake LP tokens from a pool to earn extra rewards (on top of fees), often for a limited time.

✅ Staking = you lock tokens in a smart contract to earn specific rewards. No liquidity pool involved.
{% endhint %}

### What is a liquidity pool?

Think of a liquidity pool as a reservoir of cryptocurrencies funded by users called liquidity providers (LPs).

* A pool typically holds two tokens that form a trading pair (GRAM/USDt).
* The size of the pool depends on how much of each token participants contribute.
* When someone swaps Token A → Token B, the smart contract takes B out and adds A in; the price updates automatically based on the pool’s math (AMM).
* Bigger pools usually mean lower price impact and more stable pricing for traders.

On STON.fi, LPs earn a share of trading fees from every swap that uses their pool, proportional to the liquidity they added.

How it works: 

* You select a pair (e.g., GRAM/USDt) and add tokens to the pool.
* In return, you receive LP tokens that represent your share of the pool.
* As swaps happen, you earn fees; your share auto-compounds into the position.
* You can usually withdraw anytime (unless you’ve staked LPs into a farm with a lock).

{% hint style="info" %}
**You earn**: swap fees.\
**You need**: the two tokens (or use “one-sided” options where available).\
**Main risk**: impermanent loss vs. just holding the assets. 
{% endhint %}

💡 [Learn how to provide liquidity](https://guide.ston.fi/en/how-to-provide-liquidity-on-ston.fi)

💡 [Learn more about impermanent loss](https://guide.ston.fi/en/impermanent-loss)

### Farming

Projects want deeper pools so users can trade larger volumes with less slippage. To incentivize this, a project can launch a farm that pays extra rewards to LPs.

How it works:

1. You provide liquidity to a pool and receive LP tokens.
2. You stake LP tokens in the farm’s smart contract.
3. You earn additional rewards (on top of swap fees) for as long as the farm runs or until you unstake.
4. Some farms are ongoing; others run for a fixed period and may include lock-ups.

{% hint style="info" %}
**You earn**: extra rewards (often the project’s token) + regular swap fees.\
**You need**: LP tokens from the selected pool.\
**Main trade-off**: lock-ups (if any) and the need to manage positions (claim/unstake).
{% endhint %}

💡 [Learn more about farming on STON.fi](https://guide.ston.fi/en/how-to-farm-on-ston.fi)

### Staking

Staking on STON.fi is separate from liquidity provision. You lock STON directly in a smart contract — no pool and no LP tokens.

What you get are unique protocol-related rewards:

* ARKENSTON — a soulbound NFT (non-transferable) tied to your wallet. Planned as a key to the STON.fi DAO (membership & governance access in the future).
* GEMSTON — a community token (tradable). A calculator in the Stake tab shows how much GEMSTON you receive right after staking.
* Boost Farm APR — a campaign-based perk. During the active Boost Farm APR campaign, staking STON can also unlock an APR multiplier for farming in the [STON/USDt V2](https://app.ston.fi/pools/EQBbsMjyLRj-xJE4eqMbtgABvPq34TF_hwiAGEAUGUb5sNGO) pool. The boost applies only during the campaign window and only while you have an active stake in the STON.fi app.

{% hint style="info" %}
**You earn**: specific staking rewards (ARKENSTON, GEMSTON) plus an opportunity to join an active Boost Farm APR campaign.\
**You need**: STON tokens to stake.\
**Main note**: not related to pools; rewards are protocol-specific.
{% endhint %}

💡 [Learn how to stake STON](https://guide.ston.fi/en/staking-on-ston.fi)

💡 [Learn more on Boost Farm APR](https://blog.ston.fi/introducing-boost-farm-apr-extra-rewards-for-ston-stakers/)

### Side-by-side: what’s different?

| **Feature**        | **Liquidity Provision**         | **Farming**                       | **Staking**                                    |
| ------------------ | ------------------------------- | --------------------------------- | ---------------------------------------------- |
| Assets you deposit | Pair tokens (e.g., GRAM + USDt) | LP tokens from a pool             | STON                                           |
| What you earn      | Swap fees                       | Extra rewards (+ fees)            | Protocol-specific rewards (ARKENSTON, GEMSTON) |
| Lock-ups           | Usually none (pool-level)       | Possible (farm-level)             | Depends on staking rules                       |
| Main risk          | Impermanent loss                | Impermanent loss + lock-up if any | Opportunity cost (no IL)                       |
| Tokens involved    | Pool pair                       | LP tokens                         | STON only                                      |
| Goal               | Power swaps & earn fees         | Boost pool depth & reward LPs     | Earn ecosystem rewards                         |

### Quick tips: do’s & don’ts

✅ Start small, learn the flows, then scale.

✅ Keep a little GRAM for fees.

✅ Read farm details (APR, duration, lock-ups) before staking LPs.

✅ Revisit positions regularly; claiming/farming mechanics can change.

🚫 Don’t assume pools keep “equal value” at all times — prices float with trades.

🚫 Don’t stake LPs you’ll need immediately if the farm has a lock.