❗Risks

Although Farmly Easy Farms enables users to manage liquidity in an efficient and automated way, there are some risks that users should be aware of:

Impermanent Loss

Providing liquidity on decentralized exchanges exposes users to impermanent loss, especially in volatile markets. This occurs when the price of tokens in the liquidity pool changes significantly, and this change can create a potential loss compared to simply holding the tokens.

Market Volatility

The Bollinger Bands strategy sets liquidity ranges based on price volatility. However, during periods of extreme volatility or sudden price movements, the strategy may need to update the liquidity ranges frequently, which can lead to missed trading opportunities.

Smart Contract Risk

Farmly Easy Farms is built on smart contracts and, like decentralized finance (DeFi) products, may be subject to smart contract vulnerabilities. Errors or vulnerabilities in the contract code can lead to loss of funds.

Platform Dependecy

Farmly Easy Farms depends on external platforms such as Uniswap V3 to provide concentrated liquidity. Problems or changes to these platforms (such as updates, attacks or liquidity migrations) may affect the performance or availability of the Easy Farms strategy.

Liquidity Provider Risk

Funds provided to liquidity pools are subject to the risk of changes in the value of the assets deposited. Depending on the strategy, users may experience a loss or decrease in the value of their assets relative to the market price when they withdraw liquidity.

Performance Variability

While strategies like Bollinger Bands aim to maximize returns by adjusting liquidity ranges with technical analysis, no strategy is foolproof. Market conditions can change in ways that reduce the effectiveness of the strategy, resulting in lower returns or losses.