# Competition between Staking and DeFi

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With the current emergence of new DeFi products, such as Yield Farming, DeFi products may offer users an incredible annual rate of return, but whether this prosperity is built on the ETH PoW consensus that can be maintained under the ETH 2.0 or Polkadot PoS consensus? Users can only choose one between DeFi or Staking as the problem of reward. If DeFi rewards cannot cover the cost of Staking bonding, users will move their assets from DeFi to Staking by higher reward selection. Vise versa, users will transfer their assets from Staking to DeFi products, but insufficient Staking rate may cause security problems of PoS network consensus. Thus either way will face a lose-lose situation.

Meanwhile, Staking still exists many problems such as high threshold for participation, lack of liquidity, conflict between governance and interest. PoS and PoW also have Byzantine fault tolerance problems. More users need to participate in Staking to ensure that the whole network is more decentralized and safely. Some projects adopt centralized managed schemes to solve the above problems of Staking. We believe that this operation may increase participation in Staking in the short term, but it will gradually erode the decentralized system of PoS under risk in the long term.