In recent months, Decentralized finance (DeFi) applications and yield farming have sparked the interest of many crypto faithful. But despite this, investors are still struggling to understand how the DeFi sector works as they continue to make expensive and irreversible mistakes, as reported severally.
Over $329k in YFI tokens lost forever
Just a few hours ago, yet another DeFi user was seen sending YFI tokens worth more than $452 to the smart contract address belonging to the DeFi protocol, yEarn.Finance.
This brings the total YFI tokens sent mistakenly by DeFi investors to the yEarn.Finance smart contract address to almost $329,000, an amount that is lost forever as the transactions are irreversible.
yEarn.Finance is a project that helps investors to aggregate the most profitable yield-farming products on the Ethereum network. The protocol provides a variety of functions including, leveraged trading, aggregated liquidity, and automated market-making.
The limited supply of its native token, YFI, has made it the most expensive cryptocurrency in the world, currently trading around $23,700, which is more than two times the price of Bitcoin.
DeFi degens can’t read smart contracts
This mistake, and perhaps, many others to follow, reflects the findings in CoinGecko’s survey on DeFi yield farmers. As reported, as much as 40% of DeFi investors can’t read smart contracts or understand how they work before jumping in. As a result, they continue to make serious mistakes that cost them huge losses.
The DeFi users sending tokens to the smart contract address of yEarn.Finance, were either unaware of the mistake or beginners who had no idea of how the system operates.
Notably, YFI was not the only token that was mistakenly sent to the smart contract address. More than two dozens other tokens including $LINK, Kimchi.Finance (KIMCHI), Dai, and AKRO were also sent to the address, boosting the balance to almost $356,000 gone forever.
The only way to reverse these transactions is if the smart contract had implemented a function that gives it liber to transfer any received token.
While most DeFi users lose their tokens permanently if they send to the wrong address, a few have had luck with recovering their funds, like in the case of the whale who sent $1 million worth of USDt to the smart contract address of the Swerve.Finance protocol. Thankfully, Tether, the issuer of the USDt stablecoin came to his rescue to help him recover the funds.
This article is Originally posted on CoinCentral.com
Author: Obike Favour