Compare annual percentage yields across different pools, but beware of unsustainable high yields that may indicate higher risk.
Research the platform's security measures, audit history, and insurance coverage before committing funds.
Pools with higher Total Value Locked (TVL) typically have less slippage and more stable returns.
Consider pairing stable assets together to minimize impermanent loss, or high-correlation assets.
Some pools offer higher yields but require locking funds for extended periods - consider your liquidity needs.
Understand the reward token's distribution, inflation rate, and utility to assess long-term viability.
When the price ratio of your paired assets changes significantly, you may experience impermanent loss compared to simply holding the assets.
Vulnerabilities in smart contracts can lead to fund losses. Only use well-audited platforms with established reputations.
Crypto price swings can dramatically affect your pool position value and potential returns.
Changing regulations may impact pool operations, rewards, or taxation of your earnings.