When writing code, it is not only important that the code does what it is supposed to do, but also incapable of not doing anything that it’s not supposed to do. For smart contracts which live on forever on the blockchain, this cannot be more true. Those who fail to understand this get rekted.
With interest rates (or yield, or APY) over 100% on every other Defi projects, one might overlook the level of risk associated with investing in Defi projects. In this post, I will explain breakdown different components of risk associated with Defi products, using models and theories borrowed from business finance.
Decentralized finance has been quite the hype for the past few months and I've finally decided to get my feet wet two weeks ago after my friend repeatedly prompted me to. Here's what I've learned after losing ~$5000 on yield farming.