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Questions and Answers
What is the primary purpose of yield farming?
What is the primary purpose of yield farming?
- To participate in ICOs
- To generate passive income or yield (correct)
- To mine new cryptocurrencies
- To buy and sell cryptocurrencies
What are some risks associated with yield farming?
What are some risks associated with yield farming?
- High returns and low liquidity
- None of the above
- Guaranteed profits and low volatility
- Impermanent loss, bugs in smart contracts or protocols, and exorbitant gas fees (correct)
What should yield farmers do before committing their funds to a yield farm?
What should yield farmers do before committing their funds to a yield farm?
- Trust the team behind the yield farm
- Ignore any potential risks and invest blindly
- Invest all their available funds
- Do thorough research, investigating the team, security, type of token, and timeline associated with the investment (correct)
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