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