Additional Risks

Doing due diligence is important, please take your time on properly researching associated risks related to Decentralized Finance (DeFi) and YieldFi. DeFi is a relatively new sector that is still being developed for mass market use. It presents itself not only with great features and endless possibilities that were not previously available, but also with possible risks, such as but not limited to:

Basic DeFi

In general, the use of DeFi applications can lead to losses of funds due to either malicious developers or unforeseen vulnerabilities in a given protocol/s, users should conduct their own thorough research before depositing funds into any DeFi offering.

Smart Contract Risks

Smart contracts can have bugs. DeFi runs on pieces of code which are visible to everyone, malicious actors with knowledge and experience can observe bugs in the code and exploit them.

External Protocols

As vaults interact with other DeFi products such as lending protocols and AMMs there is some risk associated with these products. YieldFi will mostly implement vaults with products that are seen as low risk but as always there are unforeseen risks associated with using DeFi products in general.

Phishing Scams

There are a lot of bad actors out there, please be careful in your interactions with other people and only open files and click on links that you are sure are not malicious.

Impermanent Loss (IL)

When there are extreme price movements in a short period of time the Liquidity Polo held by the vault will experience some impermanent loss, while YieldFi's Keepers will continually rebalance the Vaults position in order to maintain a balanced position the Vault may experience minor short term decreases in value with extreme volatility.

Liquidity

External lending protocol/s used may experience short periods where there is insufficient liquidity of particular tokens, potentially leading to a delay in withdrawals or Vaults allocating a smaller portion of the portfolio to LP farming. As lending protocols have a variable interest rate based on supply and demand, the market should return to a state where there is sufficient liquidity relatively quickly in case such an event occurs.