In recent months, the applications of decentralized finance (DeFi) and yield farming have attracted the interest of many crypto-enthusiasts. But despite this, investors are still struggling to understand how the DeFi industry works, as they continue to make costly mistakes – and above all irreversible -, as was reported on September 30.
Mistakes that cost a lot
On September 30, a user was seen sending YFI tokens to the address of the smart contract belonging to the DeFi protocol of yEarn.Finance.
The total of YFI tokens sent in error to the smart contract address of yEarn.Finance amounts to almost $ 329,000, an amount that is lost forever because transactions are irreversible.
Many investors do not understand the concept of smart contracts
This error, and perhaps many others to follow, echoes the findings of the CoinGecko on DeFi users. According to this study, up to 40% of investors are not able to read smart contracts or simply understand how they work before getting started. As a result, they continue to make serious mistakes that cost them enormous losses. DeFi users who sent tokens to the yEarn.Finance smart contract address were either oblivious to the mistake or newbies who had no idea how the system worked. Note that the YFI was not the only token that was sent by mistake to the smart contract address. Other tokens, including $ LINK, Kimchi.Finance (KIMCHI), Dai and AKRO.
While most DeFi users permanently lose their tokens if they send them to the wrong address, a few have been lucky enough to get their funds back, as in the case of a group of clumsy Chinese traders who mistakenly sent a million dollars to the address of the smart contract of the Swerve.Finance protocol. Fortunately, Tether came to the aid of the clumsy, helping them recover their funds (while violating one of the founding principles of blockchain, but that is another story).
Hello! Me is Segla Antoine Shadrac.
Passionate about finance and emerging technologies, such as blockchain, cryptocurrency and artificial intelligence, I have been part of this world of the future since 2017.