Yield Farming Checklist: Seven Things to Check Before Depositing into a Pool

The standard pre-deposit check consists of seven items and takes five minutes. The order is important: run the less expensive checks first.

Checklist

• 1. Source of returns. What is the interest based on (see our classification)? Farm token issuance = discount it by half or two-thirds right away.
• 2. TVL and its age. If the pool is only a week old and the TVL is inflated with points-you’re a beta tester. A dramatic TVL outflow means others know something before you do.
• 3. Audits and bug bounties. Don’t just ask “are there any?”-ask who and when: fresh code after an audit = unaudited code. An active bug bounty program with a decent prize pool is a sign of maturity.
• 4. Admin rights. Who can update the contract, change fees, or pause operations? A multisig with a timelock is fine; a deployer’s EOA wallet with upgrade rights-your deposit is in their hands.
• 5. Exit mechanics. Lock-up period, queue, exit fee, and liquidity for exiting your entire position-these should be verified through simulation beforehand, not in a panic afterward.
• 6. Oracles and dependencies. What drives pricing, and what will break if components depeg.
• 7. Team and track record. Serial scammers with abandoned projects-they end up on our blacklist for a reason.

A pool that honestly passes all seven criteria is a rarity. The typical result: two or three red flags, and the only question is whether the reward rate compensates for them. More often than not, it doesn’t.