CoinGecko Survey: Despite the cooling off of liquidity mining, 70% of farmers are still willing to keep farming

The data website CoinGecko recently conducted a yield farming survey among 1,012 respondents who had heard of yield farming. Only 31% of them had actually participated, with 59% of those still actively involved.

Surprisingly, DeFi and yield farming tokens have seen a significant drop in the past month, with interest rates much lower than before. However, 70% of farmers surveyed expressed their intention to continue farming in the next three months.

The key points of the survey are summarized as follows:

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Who Are the Liquidity Mining Farmers?

The survey shows that 31% of the farmers are in Europe, followed by 28% in Asia and 18% in North America, with males accounting for ninety percent.

A geographical survey of DeFi users conducted through website traffic also indicates that U.S. users dominate in categories such as lending (including liquidity mining), token exchange, and derivatives trading, followed by China. However, this cannot rule out biases due to VPN cross-border internet usage.

CoinGecko's survey is questionnaire-based, and although the sample size is small, the reliability may be relatively high.

Crops Make Up Only a Small Portion of Farmers' Holdings

Despite the lucrative rewards of liquidity mining, the interviewed farmers do not seem to be heavily invested in crops.

Among the top ten cryptocurrencies held by farmers, only Chainlink's token, such as through yearn, is held by a quarter of the people, but most of it was also bought from exchanges. Other tokens that farmers hold for farming purposes are YFI at 9%, COMP at 4.2%, BAL at 3.5%, and CRV at 3.5%.

Are Crops for Governance? Farmers: Not Interested

Although the crops in liquidity mining are touted for governance participation, the results indicate that participants in liquidity mining are not interested.

54% of COMP, YFI, and CRV holders stated that they participate in liquidity mining for long-term HODLing, with up to 32% saying they farm to sell. Only 11% farm mainly for governance voting participation.

Are Farmers Making Money? Costs, Investments, and Profits

Ethereum Gas Fees, considered as network transaction fees, are quite expensive. How do farmers manage this?

The survey found that over 75% of farmers are willing to pay over $10 in fees per transaction, with potential daily transaction expenses of over $100 for staking and reclaiming funds.

Interestingly, high fees do not necessarily mean high investments, as 52% of participants started liquidity mining with less than $1,000. This means they are willing to pay one-tenth of their investment amount in fees.

The survey also found that these farmers do not risk borrowing money to participate, with as many as 93% claiming to have earned over five times their investment.

Is Farming Over? 70% Willing to Continue

In the final part of the survey, farmers were asked if they would continue farming. The results showed that 70% are willing to do so.

Of those who agreed, 77% cited high returns as the reason to continue. However, 30% decided to stop farming due to high Gas Fees, complexity, and high risks.

Regarding whether smart contracts need to be audited for security, 49% of farmers stated they would not invest in unaudited contracts, 25% were uncertain, and 26% said, "Just invest!"

Understanding Risks, Partial Understanding of Smart Contracts

In the survey, farmers seem confident in their risk awareness, with over 79% claiming knowledge of related risks. However, 40% do not know how to view smart contracts, and 33% are unfamiliar with impermanent loss.

The survey suggests that most are aware that this is a high-risk, high-reward activity, prioritizing interest rates above all other factors. Many started without a full understanding of the situation.

Finally, the survey concludes that despite the significant decrease in liquidity mining rates, reliable projects will continue to emerge, providing advantages for early participants.