68 Finance Monthly. Inve s tmen t Positive and Negative Stances About Yield Farming The fact that yield farming gets a lot of attention is not surprising. This is because the returns from the venture are typically way higher than what is obtainable in traditional finance and other conservative investment options in the DeFi world. According to a Business Insider report published earlier this month, Virginia-based Fairfax County Police Officers Retirement System is considering investing in yield farming to boost its revenue stream. The report noted that executives of the retirement scheme see yield farming as a fixed income replacement or an opportunity to make higher returns than with rate-sensitive assets. The positive viewpoint these organisations used to profile yield farming is not the general sentiment, as industry leaders like Sam Bankman-Fried, CEO of FTX, compared yield farming to a Ponzi Scheme. BankmanFried’s words have particularly sent shivers down the yield farming and the broader DeFi ecosystem, as many investors are now re-evaluating their stance or approaches to sustainable investments. With all its complications, yield farming is a lucrative venture for investors who know their way around the space, as they are often moving their funds around from one platform to the other in a search of the best yield opportunities. On the other hand, there is the risk of impermanent loss when investing in yield farming, and unless there is a perfect safeguard to cushion the impacts of these losses, investors may get burnt severely. How to Make Your Yield Farming Safe The DeFi world is very vast, which comes with many options that might prove to be enticing to investors. The first principle to yield farming the right way is to never be moved by too-goodto-be-true promises. When the incentives are too good, they are likely to be fraudulent or unsustainable. Besides, no matter how experienced an investor is, they should never depend on their skills and knowledge only. It is vital to check the track record of the platform and its diligence with security audits. The repository of yield farming protocols is a very attractive pool for hackers, and only a thorough security check can prevent undue exploits that can further make yield farming an unbearable venture for many investors. To play safe, investors can use such cybersecurity rankings as cer.live to check the vulnerabilities of top crypto projects. While yield farming is not within the primary jurisdiction of centralised cryptocurrency exchanges, platforms like Bitrue tend to offer investors better conditions. Besides the yield “With all its complications, yield farming is a lucrative venture for investors who know their way around the space, as they are often moving their funds around from one platform to the other in a search of the best yield opportunities.” “The DeFi world is very vast, which comes with many options that might prove to be enticing to investors.”
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