40% Of DeFi Yield Farmers Can’t Read Smart Contracts: Survey

According to the latest survey by CoinGecko, 40% of DeFi yield farmers can’t actually read smart contracts codes on their own. In the upcoming crypto news, we are reading more about the survey.

The CoinGecko survey found that 40% of DeFi yield farmers could not read the smart contract code and found that 90% of the yield farmers were male, 23% of respondents were engaged in yield farming activities. About 90% of the respondents said that they achieved returns of  500% and even more. The survey also reveals that the yield farming trend right now is limited to a minority of users and that they could be taking a lot of risks that they are unaware of.

5/ Shockingly, 40% of the farmers do not know how to read smart contracts and about 33% have not heard of impermanent loss! 😱 Does this mean….. they're high risk-takers? pic.twitter.com/6Zzv8GLAA8

— CoinGecko (@coingecko) September 21, 2020

CoinGecko, the popular crypto tracking website, released the results of the survey and found that out of 1,347 respondents surveyed in August about 20% of them have taken part in some form of yield farming over the past 30 days but more than 80% were aware of the term. Responses from the online survey conducted via social media showed that about 40% of the users can’t assess the true risks of smart contracts of the automated code powering DeFi applications on their own but they do rely on auditors to identify the risks from bugs of scammers.

The audits are time-consuming and quite expensive which leads to many projects to forgo altogether thus increasing the risks for Defi farmers. According to Coingecko:

“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.”

This is only an indicator that few of the yield farmers are concerned with the risks facing their crypto deposits and a few of them are still able to identify them in the first place. DeFi consists of decentralized applications on the blockchain which are focused on financial activities and processes such as earning interest from the loans which are set up by the protocol developers for providing liquidity for token swaps. Yields on invested capital have hit 1000% on an annualized basis and the practice of putting digital assets to work in the DeFi protocols to earn the greatest returns is one component.

Out of those who had tried yield farming at least once, 60% of them were still farming which shows that the yield farming is developing yet but it has a long-term staying power. Out of yield farmers, more than two-thirds were between 30 and 59 and 90% of them were male. CoinGecko noted that the results confirmed that yield farming is still a niche activity benefiting the ones that have specific knowledge of both financial calculations and cryptocurrency.