13.6 C
Manchester
October 30, 2020
Image default
Bitcoin

Coingecko: 40% of farmers’ yield cannot “read” smart contracts |

Despite the increasing craze for DeFi in recent months, a recent CoinGecko survey revealed that only 23% of respondents are actively involved in some form of yield farming. Many farmers said they don’t understand how smart contracts work, but they enjoy high returns.

Yield Farming is becoming more and more popular

2020 is largely a boom for decentralized finance (DeFi). The rapid increase in its popularity can to some extent be attributed to yield farming – the process of earning money by blocking funds using specific protocols.

The popular CoinGecko data aggregator has carried out survey, which aim was to shed some light on the users’ perspective and their approach to digital assets, the DeFi sector, and yield farming in particular.

As the chart below shows, almost all respondents have heard of the two largest cryptocurrencies – Bitcoin and Ethereum. 94% have bought at least one digital currency, and 81% have heard of the terms liquidity and yield farming.

Interestingly, out of 1,347 respondents, only 23% replied that they had participated in yield farming in the last two months. According to CoinGecko, such a result indicates that yield farming is “still a niche, but a growing tendency”.

The study also showed that mainly men (90%) dominate yield farming, while women constitute only 6%. The remaining 4% preferred not to answer the gender question.Coingecko: 40% of farmers' yield cannot "read" smart contracts | 25

Farmers don’t know how to read smart contracts

Over the past few months, it has become clear that the DeFi sector carries considerable risk. Whether it was human error or hacking attacks, many protocols have failed their users, which in turn has resulted in significant losses in investors’ pockets.

Most of the survey participants (79%) said they understand the risks associated with DeFi. 40% of farmers said they did not know how to “read smart contracts” and 33% did not know about “perishable loss”.

According to CoinGecko, these results suggest that farmers are unable to calculate their real return on investment and are “extreme risk takers because of high returns”.

Nevertheless, 93% of respondents believe that thanks to yield farming, they achieve ROI of at least 500%. CoinGecko noted that these “they come as no surprise, as many of the new pots currently present provide insanely high APYs of over 1,000%. In our opinion, these high yields are not profitable because they are associated with high risk. “

High rewards for farmers mean they don’t mind paying higher fees on the Ethereum network. Over 70% responded that gas fees of $ 10 or more per transaction appeared reasonable at this point in time.

Coingecko: 40% of farmers' yield cannot "read" smart contracts | 26

Related posts

Whale with 68 000 BTC – big players are strong HODLers – Blocksats

Aparnna Hajirnis

The use of Ethereum by Reddit will have a very positive effect on cryptocurrencies – says Coinbase CEO – Blocksats

Aparnna Hajirnis

Crypto.com: Restoration of top-ups in EUR, campaign for API traders and lots of promotions from ALGO |

Aparnna Hajirnis

Leave a Comment