CoinGecko, a crypto data aggregator, conducted a survey which concluded that the majority of yield farmers do not understand the smart contracts supporting the decentralised finance (DeFi) protocols they use. However, their lack of understanding has not limited their use, or affected their profitability in a negative manner.
Findings from CoinGecko’s survey from 1,347 of its users have been published. The survey asked the users about yield farming, and found out that 93% of the respondents claimed to have received a financial return of at least 500%.
Yield farming has become a global phenomenon with 31% of users in Europe, 28% in Asia, 18% in North America, 10% in Africa, 7% in South America and 4% in Oceania. Around 90% of the farmers are male, with 34% aged between 30 and 39 and 25% in their twenties.
According to the survey, around half of these users are currently farming with less than $1000 and the community has concerns about making the high gas fees in the Ethereum network. However, three quarters have no problem parting with more than $10 in fees per transaction.
Out of the 1347 respondents, only 314 claimed to have previously taken part in yield farming. 59% of them are still participating in yield farming today.
The yield farming sector has a degenerate reputation that insinuates that the investors have little knowledge in the crypto space and are only after the high yields. However, the survey found that the typical yield farmer is a fairly level-headed crypto investor. 68% of them said they do not leverage their positions to minimize risks while 49% refuse to invest in unaudited protocols.
The survey found out that only 40% of DeFi users were in a position to interpret the smart contracts supporting the protocols they farm with. This means that more than half of these yield farmers could not interpret the smart contracts.
82.7% of the yield farmers hold Ether while 74% hold Bitcoin. Other altcoins with high percentages of holders are Chainlink with 25.6%, Polkadot with 19.95%, Tron with 17.3% and Litecoin with 15.7%.
Most of the DeFi projects distribute farming rewards to their users in the form of governance tokens. However, the CoinGecko survey found out that only 11% of the users have a desire to participate in governance. Also, 54% of the users seek to hold their tokens to probably speculate and earn more in future, while 32% farm to sell immediately.
Image courtesy of Pixabay
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