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Most yield farmers cannot read DeFi smart contracts

Tether USDT

A yield farming survey published by CoinGecko on Monday shows that most of the farmers have garnered up to 500 percent or more. However, a larger portion of yield farmers do not know their return of investment (ROI), nor do they know the risks involved in the Decentralized Finance (DeFi) agricultural game.

DeFi yield farmers don’t read contracts

CoinGecko’s survey somewhat indicates that many people actually did not participate in DeFi yield farming over the 30 days, despite the fuss around the activity. Only 23 percent of the 1,347 people surveyed in August took part in some form of yield farming. However, about 80 percent of them were aware of the activity, at least. 

Interestingly, a significant percentage of yield farmers cannot read DeFi smart contracts’. It appears that this set of people are extreme risk-takers for high returns, as 33 percent don’t know what impermanent loss means. This further shows that they are largely staking their capitals without having good knowledge about their real return of investment (ROI).

Farmers behavior

It’s obvious that many yield farmers depend on smart contract auditors to validate the safety or any DeFi smart contracts. This may have been working for them; however, smart contract auditors have warned that audits do not necessarily guarantee that a contract would be safe or not. CoinGecko put out a caution about this which reads:

All farmers should conduct their research before farming in any pools, as there are more copy-paste yield farming tokens that could potentially expose them to a greater risk such as code vulnerability or scams.

CoinGecko found out that the majority of yield farmers are a small subset of crypto users. Additionally, they are largely dominated by males between 30 – 59 years old. Also, 60 percent of the people who participated in the agricultural game revealed they are still farming, meaning the activity might keep developing in time to come.

Ibiam Wayas

Ibiam Wayas

Ibiam is an optimistic crypto journalist. Five years from now, he sees himself establishing a unique crypto media outlet that will breach the gap between the crypto world and the general public. He loves to associate with like-minded individuals and collaborate with them on similar projects. He spends much of his time honing his writing and critical thinking skills.

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