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Vault Risks
Yearn’s vaults can be exposed to multiple strategies. Each additional strategy increases diversification but also increases the probability that a strategy could lead to capital losses.
Risk
Description
Governance
Multi-sig approves a strategy that leads to losses
Technological
Smart contract risks increase with the number of strategies and protocols
Market
Liquidation of leveraged strategies due to sudden price falls
Lower token prices lead to lower yields in naked liquidity mining strategies
High gas fees to deposit or withdraw adversely impact yield
High gas fees cause yield on strategies to be less than expected
Deposits too low to benefit from multiple strategies
Operational
Optimal mix of strategies not maintained
Liquidations because debt positions were managed incorrectly
Safe Farming Committee interprets code incorrectly in new yield farm
Yearn website suffers outage
Oracle
Incorrect price feed leads to liquidation in leveraged strategy
Last modified 3mo ago
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