Charlie Farming - Risk Factors Guide
Charlie DeFi has come up with a new idea called Charlie Farming, for our farming community. In the last few days, we have released the DeFi Farming 101 guide, which is all about farming in DeFi. Charlie Farming will offer "alerts" for the most interesting farms that our analysts have researched. These farms will be divided into three risk categories, from the safest farming options over the long term, all the way to completely degen farming with huge APRs that will last for hours or days.
Farming forms an important part of building a DeFi portfolio, which is based on the maximization of opportunities. Our Charlie Farming - Risk Factor guide is available to help you make informed decisions should you decide to get involved with any of the Charlie Farming alerts on our Discord.
Risk Factor 7-10
- High-risk farming
- Newly launched projects
- Very high APR
- Risk of a rug pull or any other type of scam
- Potential for hacks
- Impermanent loss
- Highly inflationary rewards
- Duration of alerts in hours to days; farmer must be still active while their assets are deposited
Investors that are looking for high-risk, high-reward DeFi farming opportunities may be tempted by this category. However, this approach carries significant risks, including losing all your invested funds. Protocol farms classified under this risk category are typically newly launched projects with high APRs, and are at risk of rug pulls, scams and potential hacks. When engaging in high-risk farms, it is crucial to follow our strategy as described in the Charlie Farming alert. In many cases, we will sell all the rewards earned from these farms to stablecoins multiple times a day. This is necessary because the rewards can be highly inflationary, and selling them helps to maintain the profits. Also, there is a possibility of high impermanent loss (IL) in liquidity pools (LPs). It's important to be active while investing in these farms, and to follow all updates on our Discord server. Farmers should also only invest as much as they can afford to lose, and should not invest in these projects if they do not have enough time to monitor progress and act quickly when necessary. All our farming alerts are purely recommendations and we are not responsible for any losses.
How much can you lose? Our DeFi Farming Money Management Guide will help you with that!
Risk Factor 4-6
- Balanced farming
- New projects from known developers
- Developers with KYC
- Projects have been audited and running for longer than 3 months
- Potential for hacks
- Impermanent loss
- Some forms of staking may require locking of assets
- Duration of alerts in days to weeks
- Use Charlie DeFi Discord for up-to-date information
For those who want a more balanced approach to DeFi farming, opportunities in this category may be of interest. These could be new projects from known developers, with KYC, audited projects, and those that have been operational for a minimum of three months. In certain cases, assets in these farms may be locked for a specific period, making it challenging to exit if the farming opportunity doesn't perform as expected. Also in these risk factors we may encounter higher impermanent loss (IL). However, these projects still carry larger risks than established projects, which means there is still a chance that you lose all your invested funds. Farmers should set clear limits, turn on notifications for the Charlie DeFi Discord, and avoid investing anything more than they can afford to lose.
How much could you lose? As with the previous risk factor level, go to our DeFi Farming Money Management Guide.
Risk Factor 1-3
- Low-risk farming
- Projects that have been active for months or years
- Well-known developers
- Audited projects by reliable auditors
- High Total Value Locked (TVL)
- Community views
- Potential for hacks
- Duration of alerts in weeks to months
- Supported by large investors
- Interesting partnerships
- Passive farming, so investors do not need to check their farms every day
The lowest-risk category includes projects that have been audited by reliable auditors, have a high Total Value Locked (TVL), are supported by large investors, and have announced interesting partnerships. These projects are suitable for those who want to minimize risk and who are interested in long-term passive farming with well-known protocols. Farmers can deposit more liquidity and take a less active approach, checking in on their investments only occasionally. For the safest approach on how much to invest in DeFi Farming, check out our DeFi Farming Money Management Guide. The alerts for these farms are composed of well-correlated digital assets and will always have a good description of the associated risks. This farming strategy is intended to generate passive income for an extended period and may also make investors eligible for airdrops in the future.
Conclusion
DeFi farming is lucrative, yet risky, but Charlie Farming offers alerts that are well-researched and classified into three risk categories.
Investors can choose to take an approach that suits their risk factor. Although DeFi farming can bring high gains, there are also possibilities of losses that can occur for multiple reasons such as security vulnerabilities and impermanent loss (IL). Investors should be well informed and use our guides to get the best value from DeFi farming, rather than making impulsive decisions on their own.
Analyst opinion
Charlie Farming provides a range of alerts for active farmers with varying risk tolerances. Each of our alerts comes with a farm-specific report, an explanation of the risk, and detailed analytical information so that together, we can minimize all the potential risks. To ensure that you minimize risks and maximize profits on your side, it is essential that you stay active on our Discord. You can always ask us questions on protocols, options, progress, returns, and anything else related to DeFi farming.
High-risk farming may seem alluring due to the high APRs, but it comes with significant risks that can result in the loss of all your invested funds. Low-risk farming may be a more suitable option for those who want to minimize risk and generate long-term passive income. However, it's important to remember that even low-risk farming carries some level of risk, and investors should always do their own research and invest only what they can afford to lose. Always remember that our farming alerts are only intended to act as inspiration for you, not financial advice.
Our research analysts also participate in these DeFi farming opportunities. Our portfolios, in the premium section of the Charlie DeFi Discord, are transparent so that you can track our wallets.
Analyst
DeFi Farming 101 Guide
Charlie Farming - Risk Factors Guide
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