How to Participate in a New Farm or Liquidity Mine Launch

Detailed Instructions

Begin by conducting a deep dive into the project's core documentation. Scrutinize the whitepaper, litepaper, and official website for clarity, technical depth, and realistic goals. Assess the team's doxxing status and professional background using LinkedIn and other professional networks. An anonymous team is a significant red flag.

• Sub-step 1: Verify Social Proof: Check the project's official Twitter, Discord, and Telegram. Look for organic engagement, not just bot activity. Note the follower count and project age.
• Sub-step 2: Audit History: Search for any smart contract audits from reputable firms like CertiK, Quantstamp, or Trail of Bits. An unaudited contract is extremely high-risk.
• Sub-step 3: Community Sentiment: Use platforms like DeFi Llama, RugDoc, and Crypto Twitter to gauge community trust. Look for discussions about past performance or potential issues.

Tip: For a project on Ethereum, you can use Etherscan to look up the deployer address of the contract (e.g., 0x742d35Cc6634C0532925a3b844Bc9e...) and see their transaction history and token holdings.

Detailed Instructions

This step is critical for identifying rug pulls and economic exploits. Never interact with a contract you haven't reviewed. Focus on the token contract, the master chef/farm contract, and any timelock controller.

• Sub-step 1: Find Contract Addresses: Get the official addresses from the project's GitHub or announcement channels. Verify them on a block explorer.
• Sub-step 2: Check for Ownership Risks: On Etherscan/BscScan, under the 'Contract' tab, check if the contract owner is a multi-signature wallet or a timelock contract. A single externally owned account (EOA) as owner is dangerous.
• Sub-step 3: Review Key Functions: Look for functions like emergencyWithdraw, setFeeAddress, or mint. Ensure there are no obvious backdoors for the owner to drain funds. A simple check in the read contract section can reveal the owner:

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// Example call to check owner
await contract.owner();
// Should return a multisig or timelock address, not a personal wallet.

Tip: Use a tool like Dedaub's Contract Library to get a preliminary vulnerability assessment of the contract code.

Detailed Instructions

Poor tokenomics are the leading cause of farm failure. Analyze the total supply, circulating supply, and emission rate (tokens released per block). Calculate the Annual Percentage Rate (APR) and understand what backs it.

• Sub-step 1: Review Emission Schedule: Find the project's documentation on how rewards are distributed. A high, unsustainable APR (e.g., 10,000%+) that drops rapidly is a classic pump-and-dump sign.
• Sub-step 2: Check Token Allocation: See what percentage is allocated to the team, investors, and community. A large, unlocked team/VC allocation can lead to massive sell pressure.
• Sub-step 3: Verify Value Accrual: Ask: How does the protocol generate real revenue? Does the reward token have utility (e.g., governance, fee sharing) beyond farming? If the only use is to be staked for more tokens, it's a ponzinomic model.

Tip: Use a calculator to project your potential returns against the emission schedule. If emissions are 100 tokens/block and there are 10,000 blocks/day, that's 1,000,000 tokens emitted daily, creating massive sell pressure.

Detailed Instructions

The liquidity pool (LP) is where your funds will be deposited. Its security is paramount. The most critical action is verifying that the LP tokens are locked in a verifiable, time-bound contract.

• Sub-step 1: Find the LP Pair: Identify the LP token address for the pair (e.g., PROJECT/WETH) on a DEX like Uniswap or PancakeSwap.
• Sub-step 2: Check Liquidity Lock: Go to a locker service website (e.g., Unicrypt, Team Finance) or check the LP token contract itself to see if the team's liquidity is locked. Look for the lock duration—anything less than 6 months is risky. You can often query this:

solidityCopy
// Example to check lock end time on a common locker contract
ILocker locker = ILocker(0xlockerAddress);
uint256 unlockTime = locker.unlockDate(lpTokenAddress, teamWalletAddress);

• Sub-step 3: Analyze Initial Liquidity: Assess the amount of initial liquidity provided. A very small amount (e.g., $50k) relative to the market cap ambition makes the pool highly manipulable.

Tip: Before depositing, do a test transaction with a minimal amount (e.g., $1) to confirm the deposit/withdrawal functions work as expected and to check the actual gas fees and slippage.

Detailed Instructions

Immediately after depositing liquidity, you must establish a real-time monitoring dashboard. This is your central hub for tracking the health of your investment. Do not rely on the project's website alone, as it may not show all data or could become inaccessible.

• Sub-step 1: Use Portfolio Trackers: Add your wallet address to platforms like DeBank, Zapper, or Ape Board. These aggregate your positions across chains and display your total value locked (TVL), current APY, and earned rewards.
• Sub-step 2: Monitor On-Chain Metrics: Use blockchain explorers (e.g., Etherscan, BscScan) to watch the pool's contract for unusual transactions. Set alerts for large, sudden withdrawals from the master chef or staking contract.
• Sub-step 3: Track Token Price & Volume: Use DEX screener or CoinGecko to monitor the farm token's price, trading volume, and liquidity depth. A sharp drop in volume or liquidity is a major red flag.

Tip: Bookmark the exact pool page on the DEX (e.g., the Uniswap V3 pool address) and the staking contract address for quick, direct access.

Detailed Instructions

Impermanent Loss (IL) is the opportunity cost of providing liquidity versus simply holding the assets. You must calculate this regularly against your accumulated reward tokens to determine if farming is profitable.

• Sub-step 1: Calculate Current IL: Use an online calculator (e.g., dailydefi.org). Input the original and current prices of your paired assets (e.g., ETH/USDC). If ETH doubles in price, your LP position will be worth less than just holding the ETH.
• Sub-step 2: Value Your Rewards: Convert your earned farm tokens (e.g., $NEWFARM) to a stablecoin value using the current market price. Use a DEX to get the real quote: 1 $NEWFARM = 0.05 USDC.
• Sub-step 3: Perform Net Profit Analysis: Subtract the calculated IL (in USD) from the total USD value of your claimed rewards. If IL consistently outweighs rewards, the farm may be unsustainable.

Tip: For volatile pairs, monitor IL daily. For stablecoin pairs, weekly checks may suffice. Automate calculations with a spreadsheet using live price feeds.

Detailed Instructions

Your exit strategy must be based on predefined, objective triggers, not emotion. Continuously evaluate the protocol's health metrics and community sentiment.

• Sub-step 1: Watch Treasury & Dev Wallets: Use Etherscan to track the project's treasury and team token wallets. A sudden, large transfer to an exchange (like Binance deposit address 0x...) may signal a dump.
• Sub-step 2: Monitor Reward Emission & Inflation: Check if the emission rate is increasing unsustainably. A common red flag is the team voting to drastically increase rewards to attract new capital, diluting existing farmers.
• Sub-step 3: Set Price & APY Triggers: Decide your thresholds in advance. For example: "Exit if APY falls below 25%" or "Exit if the farm token price drops 40% from my entry."

Tip: Join the project's Discord and Telegram. Listen for changes in developer communication frequency and community morale, which are leading indicators of trouble.

Detailed Instructions

When your exit trigger is hit, execute a swift, secure, and gas-efficient exit. The goal is to convert your position back into base assets (like ETH or stablecoins) with minimal slippage.

• Sub-step 1: Claim Outstanding Rewards: First, call the claim or harvest function on the staking contract. Always check for pending rewards first. Example contract call:

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// Example for a common MasterChef contract
contract.claim(rewardPid);

• Sub-step 2: Withdraw All Liquidity: Immediately after claiming, call the withdraw or emergencyWithdraw function to remove your LP tokens. Use the full amount: contract.withdraw(pid, lpTokenBalance).
• Sub-step 3: Remove Liquidity from DEX & Swap: Go to the DEX (e.g., Uniswap), break your LP tokens back into the underlying assets, and immediately swap the volatile farm token for a stablecoin. Use a limit order or split the swap into chunks to avoid high slippage.

Tip: Plan your exit during low network congestion to save on gas fees. Have the contract ABIs and interaction tabs (like on Etherscan) pre-loaded for speed.