The answer to this question, as in much of life, is: it depends. In general, a waterfall only aerates the surface of the water, down to approximately the depth the water penetrates when it falls, and oxygenated water likes to stay near the surface, which isn’t sufficient on its own. If you have a powerful, high waterfall, the cascading flow could certainly absorb plenty of oxygen, so long as it was aided by an efficient circulator to carry oxygenated water throughout all the nooks and crannies of your pond. Not many ponds boast a crashing waterfall, though, and operating a waterfall pump of that size 24 hours per day promises to eat a significant chunk of your budget. It’s important to remember that aeration needs to be constant, 24 hours per day, as dissolved oxygen is constantly being consumed by fish and millions of beneficial microorganisms. Lack of oxygen = fish death, an equation no pond owner wants to contemplate.
If your desire is to stay on a budget, a more economical solution would be to install a smaller aeration pump to work in tandem with your filtration system that moves water throughout your pond. Since it’s not trying to lift water several feet high, it requires a much less powerful pump that’s cheaper to operate and maintain over time. Ideally, it will either have aeration stones that rest near the bottom of your pond or will draw water from the bottom, where oxygenated water rarely reaches, and release it near the top, perhaps as a bubbly little fountain. Even better, the combination of direct aeration, good filtration, and good water chemistry will produce crystal clear water, which is a joy to see, and a much smaller dent in your wallet, which is an entirely different kind of joy.
