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Author: Admin | 2025-04-28
The token pair in the pool returns to its value at the time of deposit, the ‘loss’ disappears. However, such a situation can be rare, making the losses in other cases permanent. Different protocols offer mitigation techniques to impermanent loss, while other protocols are not subject to this category of risk.“Rugpull” risk —A “rugpull” is a term used to describe a situation when malicious actors launch a token only to extract as much value from it as possible before abandoning the project. Rugpulls can happen in various ways—by removing a considerable portion of the liquidity from an AMM, preventing selling in the token’s contract, minting a significant amount of new tokens, and more. DeFi users need to consider the risks associated with early-stage projects and do their own diligence before deciding to participate in a newly launched project.DeFi Yield Farms Powered by ChainlinkTo further boost the liquidity incentivization and fair distribution of tokens enabled by yield farming, smart contract developers can leverage additional infrastructure. Powered by decentralized oracle networks, Chainlink Price Feeds and Chainlink Automation can be used in a multitude of ways in yield farming.Proportional pool rewards —DeFi protocols can integrate Chainlink Price Feeds to calculate the total USD value of staked assets in a multi-asset pool and distribute rewards proportionally. This allows them to cultivate a large pool of different assets, with greater rewards going to users who provide more valuable liquidity.Auto-adjusting rewards —Chainlink Price Feeds can be used to provide the market price of an existing yield farming token on-chain. This allows for unique opportunities such as autonomously adjusting the number of tokens minted according to their market-wide price, potentially stabilizing the yield farming return for users. This Price Feed can also be used by other dApps to quickly create new DeFi-based financial products that support the
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