Most yield farming investors do not read DeFi smart contracts. This leaves users vulnerable to many risks.
Most farmers earn 500 percent or more, according to a yield farming survey published by CoinGecko on Monday. However, a larger proportion of yield farmers do not know their return on investment (ROI) and are unaware of the risks involved in this application of Decentralized Finance (DeFi).
Contracts Not Read
CoinGecko’s survey somehow shows that despite the confusion around the event, most people did not participate in DeFi yield farming for 30 days. Only 23 percent of the 1,347 people surveyed in August participated in some form of yield farming. However, at least about 80 percent of them were aware of the activity.
Interestingly, a significant percentage of users do not read DeFi smart contracts. It looks like this group of people are the ones who take extreme risks for high returns because 33 percent don’t know what non-permanent loss means. This also shows that they invested their capital substantially without having a good knowledge of their true return on investment (ROI).
It is clear that many yield farming users depend on smart contract checkers to validate security or any DeFi smart contract. This may work for them; however, smart contract auditors have also warned that audits do not guarantee whether a contract will be secure.
CoinGecko also made a statement about it:
“As there are more copy-paste yield farming tokens that could potentially expose you to a greater risk of code vulnerability or fraud, all users should do their research before farming in any pool.”
CoinGecko discovered that most yield farmers are a small subset of crypto users. Additionally, largely men aged 30-59 do not dominate this area. Also, 60 percent of the people participating in yield farming reported that they still continue, which means the activity can continue to improve over time.