Risks to Yield Farmers

Impermanent Loss (IL):

  • Risk: Risk of (impermanent) capital loss from asset rebalancing in the Automated Market Maker ("AMM") pool. Stable coins pairs farming are also subjected to impermanent loss. Just like any other coins, the price of stable tokens are dictated by supply and demand, which some time can cause the price to be off-pegged. While this value is generally small and transient, we have seen instances where stable coins stay off-pegged for an extend period of time.
  • Mitigation: Impermanent loss is not unique to Lukylion. It is common among all yield farming and AMMs. While we currently do not yet have a way to mitigate IL, users can choose to yield farm asset pairs that have high correlations to minimize potential IL. For more information on IL, you can start with this article.

Risks to Gamers


  • Risk: iGaming's operations are highly dependent on technology and advanced information systems and there is a risk that such technology or systems could fail. In particular, any damage to, or failure of online systems and servers.
  • Mitigation: Lucky Lion has a level of resilience in place which seeks to eliminate single points of failure within key technology locations.
  • Risk: For many people, iGaming is harmless fun, but in rare instances, it can become a problem. This type of compulsive behavior is often called “problem gambling.” It is classed as an impulse-control disorder.
  • Mitigation: As with all investing, never play more than you can afford to lose. Give yourself a time-limit, and limit the days you play online. If you feel you are addicted, seek professional help immediately. Thankfully there are countless resources online ranging from self-help articles, community forums to medical assistance.

Smart Contract Risks

  • Risk: While smart contracts have been audited by third-party firms, they could theoretically have vulnerabilities.
  • Mitigation: Having smart contracts audited by multiple professional third-party firms decreases the chance of vulnerabilities. We run a bug bounty program to provide incentives for people who find vulnerabilities in our live code to come to us as opposed to exploit them.
While Lucky Lion does their best to eliminate all the possible risks, DeFi is an industry where events that no one predicted can occur. The golden rule is never risk assets you cannot afford to lose.