In 2026, I think the biggest question is whether the extra return still justifies that complexity.

A basic lending position is relatively easy to understand: deposit an asset, borrowers pay interest, and part of that interest becomes your yield. Yield farming can be much more complicated. Returns may depend on liquidity incentives, governance token emissions, automated vault strategies, leverage or several protocols interacting with each other.

Smart contract risk is the obvious concern. Even a strategy built on established platforms can depend on multiple contracts. If one protocol is exploited, an oracle fails or a vault strategy behaves unexpectedly, losses can spread across the entire position.

Impermanent loss is another issue that still gets underestimated. Providing liquidity can generate fees, but the final result may be worse than simply holding the underlying assets if their prices move significantly relative to each other.

Then there is the question of where the yield actually comes from. A 20% APY funded mainly by newly issued tokens is very different from a lower return generated by real borrowing demand or trading fees. High headline yields can disappear quickly once incentives are reduced.

I also think opportunity cost matters. If a user can earn a more predictable return through staking or a relatively established lending market, accepting much higher smart contract and liquidity risk for a few extra percentage points may not make sense.

That does not mean yield farming is dead. There are still strategies where the return can justify the risk, especially for users who understand the protocols involved and actively manage their positions. But I would be much more selective than simply chasing whichever pool displays the highest APY.

Do you still use yield farming strategies in 2026?

What minimum return would justify taking additional smart contract, liquidity and protocol risk for you?

And when evaluating a farm, do you focus more on real yield, protocol history, audits, TVL, token incentives or the number of dependencies behind the strategy?

Centralized exchanges are still easier for many users. They usually provide deep liquidity, fast order execution, advanced charting, limit orders and a familiar trading interface. For active traders, especially those moving larger positions, that combination can be difficult to replace.

The main trade-off is custody. When funds remain on a centralized exchange, users depend on the platform’s security, withdrawal systems, internal risk controls and overall financial stability. Even a large exchange can create problems if withdrawals are delayed, accounts are restricted or the platform experiences a security incident.

DEXs solve part of that problem by allowing users to trade directly from their wallets. Self-custody remains with the user, and there is usually no need to deposit funds into an exchange account before trading. That can be a major advantage for people who want to minimize counterparty risk.

At the same time, decentralized trading introduces different risks. Smart contract vulnerabilities, malicious tokens, liquidity problems, slippage and incorrect wallet approvals can all create losses. On some networks, the quality of execution can also depend heavily on available liquidity.

I think the gap between the two models is narrowing. Modern DEXs can now offer much better interfaces, deeper liquidity and more advanced trading tools than they did a few years ago. At the same time, centralized exchanges are improving proof-of-reserves systems, custody infrastructure and institutional-grade services.

For me, the decision often depends on the trade itself. A highly liquid BTC or ETH position may be easier to execute on a centralized exchange, while smaller on-chain assets may only be available through a DEX.

Where do you prefer to trade crypto today?

Do you prioritize liquidity and execution quality on centralized exchanges, or self-custody and direct wallet trading on DEXs?

And do you use both depending on the asset, or have you mostly moved toward one model?

The most obvious risk is smart contract failure. Even established protocols can contain vulnerabilities, and an audit does not guarantee that every possible exploit has been discovered. New users sometimes treat audited contracts as completely safe, when in reality an audit only reduces part of the technical risk.

Oracle risk is another area that is often overlooked. Many lending and derivatives protocols depend on external price feeds. If those feeds become inaccurate, delayed or manipulated during volatile conditions, positions can be liquidated or protocols can behave in ways users did not expect.

Liquidity risk can be just as important. A token may appear easy to trade under normal conditions, but liquidity can disappear quickly during a market shock. Slippage increases, collateral values fall and leveraged positions become much harder to manage.

Bridges deserve special attention as well. Moving assets between blockchains can introduce an entirely separate layer of smart contract and infrastructure risk. A user may think they are simply transferring the same asset to another network, while actually relying on bridge contracts, wrapped assets and additional security assumptions.

There is also protocol dependency risk. A single DeFi strategy may involve several connected services: a lending platform, liquid staking token, decentralized exchange and automated vault. If one of those components fails, the entire position can be affected.

New users also tend to underestimate wallet and transaction risk. Signing the wrong approval, interacting with a malicious interface or granting unlimited token permissions can lead to losses even when the underlying DeFi protocol itself is secure.

Finally, high yield can hide a surprising amount of risk. A 15% or 20% return is not automatically attractive if it depends on volatile incentives, leveraged exposure or tokens with rapidly changing value. Understanding where the yield actually comes from is just as important as the percentage displayed on the screen.

Which DeFi risk do you think beginners underestimate most?

Is it smart contract risk, oracle failures, liquidity problems, bridge exposure, wallet approvals or protocol dependencies?

And what is the first security rule you would teach someone before they start using DeFi?

The positive side is obvious. Major DeFi protocols now have longer operating histories, more professional audits, better monitoring, stronger risk frameworks and much larger communities watching for vulnerabilities. Some platforms also use bug bounty programs, formal verification and real-time security systems that were far less common a few years ago.

At the same time, the number of moving parts has increased dramatically. A single DeFi position can depend on several smart contracts, price oracles, bridges, liquidity providers, governance systems and external protocols. Even if each individual component looks relatively secure, the combined system can still create unexpected failure points.

Composability is one of DeFi’s biggest strengths, but it is also one of its biggest risks. A lending protocol may depend on an oracle, which depends on market liquidity, while collateral is supplied through another protocol and moved across a bridge. A problem in one layer can quickly affect several others.

I also think users sometimes confuse established brands with low risk. A protocol may have billions in total value locked and still be exposed to smart contract bugs, governance attacks, oracle manipulation or liquidity shocks. Large TVL can indicate trust and adoption, but it does not automatically guarantee security.

Yield strategies are becoming more complicated too. Higher returns often require stacking several layers of risk, including liquid staking tokens, lending markets, leverage and automated vaults. The headline yield can look attractive while the actual risk exposure is difficult to understand.

For me, DeFi is becoming more professional, but that does not necessarily mean it is becoming simpler or risk-free. Better infrastructure can reduce certain risks while new financial structures introduce entirely different ones.

Do you think DeFi is genuinely safer today than it was a few years ago?

Which risk concerns you most — smart contract exploits, oracle failures, bridge vulnerabilities, governance attacks, liquidity problems or protocol dependencies?

And do you think ordinary users can realistically evaluate these risks without deep technical knowledge?