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 |