Custodial yield farming involves earning returns on cryptocurrency holdings by utilizing a third-party service to manage funds. Users deposit their assets into a platform that takes care of the investment process. This platform typically offers access to various decentralized finance (DeFi) protocols to generate yields from lending, borrowing, or liquidity mining.The main benefit of custodial yield farming is that it simplifies the process for users who may not have the skills or time to manage their investments directly. The platform’s custodial nature means that it holds the assets on behalf of the user, allowing for easier access and management.However, trusting a third party has risks, including the potential for hacks or mismanagement of funds. Users should carefully evaluate the platform’s security measures and track record before participating. While custodial yield farming can offer attractive returns, it’s essential to balance potential rewards against the inherent risks of relying on external services.